Legal Loopholes in Cryptocurrency Theft Case
In a remarkable turn of events, a man facing trial in Germany has managed to avoid criminal charges related to the alleged theft of $2.9 million (€2.5 million) in cryptocurrency, due to several peculiar legal loopholes. The proceedings took place in the Braunschweig Higher Regional Court (OLG), centering around the purported theft of 25 million unspecified cryptocurrency tokens.
Details of the Allegations
Court documents reveal that the defendant was initially involved in assisting the victim with setting up a cryptocurrency wallet for a project, during which he gained access to a crucial 24-word seed phrase. It is alleged that he then executed an unauthorized transfer, moving the tokens into two wallets that were beyond the victim’s control.
Legal Definitions and Court Rulings
However, under the provisions of Section 242 of the German Criminal Code (StGB), theft is narrowly defined as the act of taking someone else’s movable property. Cryptocurrencies, including Bitcoin and Ethereum, are categorized as intangible assets without physical presence, thereby falling outside the legal definition of “things.” This interpretation, reported by the German newspaper Heise, formed the basis for the judges’ decision to dismiss the theft charges.
Other criminal allegations surrounding the case were also struck down. The court ruled that
“computer fraud”
could not be applied, as it was not possible to definitively establish unauthorized data manipulation leading to financial gain in the context of blockchain transactions. Furthermore, the judges stated that
“a declaration of genuine authorization for the transaction cannot be assumed in decentralized blockchain networks.”
Insufficient Evidence and Future Implications
The judges also addressed the claim of falsifying evidentiary data, ruling that there was insufficient evidence regarding the identifiability of the issuer involved. Although they acknowledged that some data had undergone alteration, they concluded that the changes were executed by network operators, who are deemed authorized to manage the data on the blockchain.
Despite escaping criminal charges, the accused may still confront civil liability, especially given the substantial amounts involved in the case. A lawyer from WINHELLER, a law firm in Germany specializing in crypto assets, commented that this ruling highlights a significant legislative gap that could see millions in cryptocurrency stolen without any criminal repercussions. Experts in the field suggest that this situation may trigger immediate legislative changes aimed at amending theft laws related to digital assets and establishing dedicated legal frameworks for cryptocurrency-related offenses.
