The Legal Position Of The Bitcoin And Crypto Coins

Health & Fitness

In the contribution from yesterday, we have seen that the Bitcoin and crypto coins must legally be considered a property under property law. This determines the place of the Bitcoin and crypto coins in the law and we can see what legal consequences Bitcoins and crypto coins may have. With these consequences we stand still in this article.

The Bitcoin and crypto coins in civil law

The right is to split up into various parts, so you can talk about civil law, criminal law and tax law. In this article we focus on civil law (the law that applies between citizens and companies). The next section focuses on inheritance law, after which we focus on the position of the Bitcoin in criminal law and in the latter part on tax law. Once again we only speak about Bitcoins for convenience, while the provisions also apply to other crypto coins.

Bitcoin as a guarantee

In the Netherlands, as far as we know, there are no parties accepting Bitcoin or other cryptocurrency as security for, for example, financing. However, there are various facilities abroad in that area.

Batter on your Bitcoin?

One of the options for obtaining a claim is in the Netherlands the seizure. There are two forms of seizure, the prejudgment attachment and the executory attachment. Conservatoire seizure is a provisional attachment that can be requested through a lawyer. The court must always give permission in advance for this. This attachment is made to ensure that payment can be made (possibly by selling confiscated items) if the person who is seized must pay in the future. If the court has already confirmed that someone has to pay, then things of the person who has to pay (the debtor) can be confiscated to be sold. The seizure is carried out by a bailiff.

Conservatoire attachment to the Bitcoin

As far as we know, there has been one case where conservative attachment has been placed on Bitcoins. In this case someone had paid an invoice with Bitcoins. After a dispute this person wanted his Bitcoins back. In order to prevent the person who was paid, the Bitcoins would disappear in the meantime, prejudgment attachment has been made.

Enforcement on the Bitcoin

Although we do not know of any case where executory attachment has been imposed on Bitcoins, this could theoretically be possible. To this end, the law provides at least the possibilities based on the Code of Civil Procedure (Article 430 et seq.).

Complicating factors in attachment to Bitcoin

The Bitcoin (BTC) is relatively anonymous and decentralized. In order to be able to seize Bitcoins, a bailiff will therefore have to find out whether the person he seeks to seize also has Bitcoins.

The Bitcoin actually occupy

In addition, the attachment does not make sense if he does not actually get the Bitcoins in his hands. After all, transactions are also anonymous. The bailiff will therefore have to open a cryptowallet himself and ask the court not only for attachment to the Bitcoins itself, but also for seizure of the private keys. In addition, he will have to ask the judge to force the person concerned to give the bailiff access to his computer in order to get the Bitcoins out of it. This brochure has been written about the difficulty .

The value of the Bitcoin during the confiscation

Another discussion is the discussion about price fluctuations during the period of seizure. As we have seen in the previous section, there is no possibility of compensation for damage as a result of hypothetical price fluctuations. How would this be with a (preserving) seizure. After all, by transferring to their own crypto coin, the Bitcoins are actually out of the control of the initial owner. The question is how to deal with the fluctuations in value during the period of seizure.

In the aforementioned case of conservatory attachment, the discussion did not occur according to the lawyer involved. We are not yet aware of any practical case in executory attachment, but we do know that the term within which the bailiff has to proceed to the actual sale after seizure amounts to 4 weeks. Everyone knows how much the value of the currency can differ in four weeks. The question of who is responsible for missed price gains in the time that a seizure is made could be interesting. We can undoubtedly expect jurisprudence about this.

The Bitcoin and the bankruptcy

That someone who has debts can lose their Bitcoins if the debts have to be paid we conclude from the above. In the event of bankruptcy, assets can also be seized, including Bitcoin, including its complicating factors relating to actual possession and private key. What if the case is the other way around. Suppose you have done a case with someone and have agreed on payment in Bitcoins. The person who has to pay does not do this, but goes bankrupt before you have had your money. Can you claim your damage in Bitcoins from the curator of the bankruptcy?

The bankruptcy trustee only accepts verified claims in the settlement of the bankruptcy. In the bankruptcy case of Koinz Trading BV, a creditor requested the court to declare the bankruptcy of the BV. This is because this BV had not met a previous judgment to pay 0.591 Bitcoin to a duped miner. The court ruled that there is a verifiable claim if payment is to be made in Bitcoins and this is neglected. The bankruptcy was therefore pronounced in 2018.

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