29.07.2025 23:24
A German appeals court ruling has sparked widespread concern within legal and cryptocurrency circles. The court determined that transferring cryptocurrency using legitimately obtained wallet passwords, even without permission, might not constitute a criminal offense under existing German law. This decision exposes a significant gap in legal frameworks designed to address theft in the digital asset space.
The case involved a man who assisted another individual in setting up a cryptocurrency wallet containing €2.5 million worth of digital tokens. Crucially, he retained the 24-word recovery phrase, which the victim never altered. Subsequently, he used this phrase to transfer and potentially steal the entire sum without authorization, further compounding the offense with false statements. Despite this blatant breach of trust, the Higher Regional Court of Braunschweig acquitted the defendant.
The court's rationale centered on the argument that the defendant didn't "hack" the wallet, given his legitimate possession of the access keys. This, they argued, failed to meet the criteria of “overcoming special access security” as stipulated in the German Criminal Code. Furthermore, the court rejected charges of computer fraud, reasoning that blockchain technology inherently lacks mechanisms to verify user intent or authorization; it merely validates cryptographic signatures. The manipulation of data was also dismissed as a criminal charge.
This ruling has troubling implications. It effectively creates a legal loophole, potentially shielding individuals from criminal liability for actions that would be unequivocally classified as theft in traditional finance. The decision underscores the significant challenge facing legal systems in adapting to the unique technical architecture of decentralized digital assets. While acknowledging potential civil liabilities, such as breach of contract or violation of trust, the court emphasized that these don't automatically translate to criminal offenses. The court's interpretation highlights the urgent need for legislative reforms to address the complexities of digital asset theft and ensure appropriate legal recourse for victims.
