Bitcoin Seizure: German Law Cracks Down on Crypto Asset Access

Yes, Bitcoin can be seized by creditors and insolvency administrators. According to German law, crypto assets are considered 'other property rights' under Section 857 of the Code of Civil Procedure.

This classification was confirmed by the Berlin Higher Regional Court in December 2023, making it clear that arguments claiming Bitcoin escapes enforcement law due to its technical nature do not hold up in court.

The process of seizing crypto assets depends on whether they are held with a service provider or self-custody. If held with a provider, creditors can attach the payout claim against the third-party debtor, which is usually served through an address within the European Union. However, if the provider has no seat and no authorization within the jurisdiction, attachment may not be possible.

Self-custody cases require cooperation from the debtor, who must disclose their assets and provide access to them. Failure to do so can lead to coercive measures against their person. The Cologne Higher Regional Court ruled in June 2024 that debtors cannot rely on lost credentials as a blanket defense; they must exhaust reasonable measures to regain access.

In insolvency proceedings, crypto assets form part of the insolvency estate and are subject to cooperation with the administrator. Debtors have a duty to provide information and cooperate in realizing their assets.