Crypto Litigation

Germany has no law written specifically for crypto seizure; courts apply the general confiscation rules of the Strafgesetzbuch, sections 73 and following, and the procedural securing powers in sections 111b and following of the Strafprozessordnung to wallets and exchange accounts the same way they apply to bank accounts and property. A court or, where there is imminent danger, the public prosecutor's office can order a freeze; the harder part in practice is identifying the exact wallet or account to name in the order, which is why a freezing application almost always depends on a tracing report completed beforehand.

A case before the regional court of Dresden addressed whether crypto assets held by a third party at an exchange could be confiscated in a criminal proceeding tied to bitcoin proceeds from a shut-down darknet marketplace. The court's reasoning turned on ownership and control, the same questions any confiscation case asks, applied to a crypto exchange account instead of a bank account. The case shows German courts treating a crypto claim inside the existing legal framework, without waiting for crypto-specific statutes. Litigants build their arguments from established property and criminal procedure law.

A German court accepts expert testimony from a publicly appointed and sworn expert or from another qualified specialist the court or a party engages for the case. In a crypto matter, the expert's job is to translate a blockchain's raw transaction data into a narrative a judge without technical background can follow: which wallet sent what, when, and how it connects to the party in the case. The same tracing methods used in blockchain forensics and asset tracing feed directly into this kind of report, built to hold up under cross-examination, a higher bar than an internal compliance file has to clear.

Directive (EU) 2024/1260, adopted in April 2024, requires every member state to run tracing, freezing, confiscation and asset management procedures that explicitly cover crypto-assets. For cross-border litigation, this matters because a claimant chasing funds that moved through wallets and exchanges in several countries can expect a more consistent legal toolkit in each jurisdiction than existed before, even though enforcement still runs through each country's own courts and asset recovery offices.

Finance Loop connects the lawyers, compliance officers and forensic specialists who work on crypto disputes at events such as When Banks Say 'No' in Frankfurt, where sanctions and anti-money laundering law shared the agenda with blockchain investigation methods. Crypto litigation sits in the Finance Loop Risk & Compliance track, next to crypto asset tracing and blockchain forensics.

Courts apply the general asset freezing and confiscation rules of the Strafgesetzbuch and Strafprozessordnung to crypto wallets and exchange accounts. The practical requirement is a specific, identified wallet or account to name in the order, which is why a freezing application depends on tracing work being done first.

A crypto expert witness explains blockchain transaction data to the court in plain terms: which wallets are linked, how funds moved between them, and how that connects to the parties in the case. The expert's report has to hold up under cross-examination, built on the same tracing methods used in asset recovery and compliance work.

The EU's Asset Recovery Directive, in force since 2024, requires every member state to build tracing, freezing and confiscation procedures that cover crypto-assets. This gives claimants a more consistent legal framework across the EU, though each case still runs through the national courts and asset recovery offices of the country where the assets or the defendant are located.