Bitcoin theft: 3 questions for lawyer Christian Solmecke

Mr. Solmecke, when do you speak of theft of cryptocurrencies in the legal sense?

Solmecke: The stealing of cryptocurrencies is not a “theft”, because theft in our Section 242 Penal Code only sanctions the removal of someone else’s movable property (touchable). However, cryptocurrencies are purely digital assets.

However, perpetrators do not go unpunished. In these cases, the perpetrator can be punished for committing data crimes. For example, criminal liability for spying on data can be considered, § 202a of the Criminal Code – this includes all methods with which one can overcome “access security” to data. The offender faces a prison sentence of up to three years or a fine. A perpetrator faces the same threat of data stolen goods, § 202d StGB, if he procures or disseminates illegally obtained data in order to enrich himself or a third party or to harm another.

In fact, this shows that criminal law still has gaps in cryptocurrencies. Because while theft can be punished with up to five years in prison, a maximum of three years is quite mild for data crimes because they are only based on hacking and not also on the reduction of assets. When stealing cryptocurrency, however, the same injustice ultimately occurs as when it is stolen, one person takes his or her assets away from another. A reform is therefore necessary here.

Suppose I have a hardware wallet that has cryptocurrencies in the form of bitcoin on it. Now a hacker gains access to this wallet and empties it. The hacker is now caught. Can I sue this one?

Solmecke: Yes, it is quite possible to sue the hacker for the return of what he has enriched himself with. With the “right of enrichment”, civil law offers at least one legal basis that gives the “stolen” person the right to get the Bitcoin or its value back. So-called tortious liability may also come into consideration, but this is controversial. Ultimately, however, this is primarily a legal debate. The difficulty in practice, however, will usually be to catch the perpetrator at all, to fight for a judgment in international legal transactions and to enforce this in practice.

Suppose the coins are on a crypto exchange and this is where a hack occurs. Do I have any claims for damages against the stock exchange?

Solmecke: What matters here is whether the perpetrators have exploited an avoidable weakness in the crypto exchange. If the stock exchange is at fault, claims for damages against it could be considered. However, if the exchange has done everything reasonable to protect the coins from a hack, a lawsuit is unlikely. In addition, one must consider that the customer as the plaintiff must prove that the exchange made mistakes. This is not always easy due to a lack of insight into the internal system.

Disclaimer

This article previously appeared in the May issue of BTC-ECHO Magazine.

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