German law creates loophole for $2.9 million crypto theft

A man in Germany has escaped criminal charges after being accused of stealing $2.9 million (€2.5 million) in cryptocurrency. This incident has exposed a significant loophole in German law, highlighting the inadequacies of current regulations regarding digital assets.

Legal loophole and consequences

According to court records, the defendant assisted the victim in setting up a crypto wallet and, during that process, obtained the seed phrase. He then transferred 25 million tokens from the victim's wallet to other wallets that the victim did not control.

However, the Higher Regional Court #Braunschweig (OLG) could not charge this individual because:

Definition of "theft": According to the German Criminal Code, theft is defined as "taking away someone else's tangible property." Since cryptocurrency does not have a physical form, it is not considered a "thing," making the theft charge inapplicable.

Crime of "computer fraud": The judges argued that blockchain transactions cannot be clearly linked to acts of unauthorized data manipulation. They stated that "one cannot assume a legitimate authorization statement for transactions in decentralized blockchain networks."

Despite escaping criminal charges, the defendant may still face civil lawsuits for damages. Legal experts predict that legal amendments are "very likely to occur" to fill this legal gap, expanding the definition of theft for digital assets and creating specific criminal regulations related to crypto. #anhbacong