11 July 2022

Seizure of digital assets

By Janine van den Bemt

Read more about the seizure of digital assets below.

“No cash or expensive cars, but seizure of NFTs

This is the headline of a news report issued by the police earlier this year. This is the first time NFTs have been seized by a Dutch investigative service.

NFTs, or non-fungible tokens, are non-exchangeable, irreplaceable digital asset certificates. These certificates can be created digitally and can be linked to a digital object, such as an image. NFTs are still popular and trading NFTs can be very lucrative. NFTs can fetch millions of dollars in online auctions. For example, an NFT was recently sold for $23.7 million.

Seizure of digital assets

The police are increasingly seizing digital assets in investigations into criminal money. The option of seizing digital assets is also relevant in conflicts between citizens or companies.

Suppose you are still owed money by your debtor and your debtor does not pay. It may then be worthwhile to investigate whether your debtor holds any NFTs or crypto-currencies.

If so, you can apply to the courts for a levy of a ‘prejudgment’ attachment. A prejudgment attachment ensures that the debtor cannot sell or misappropriate his/her assets before you have had a chance to recover the amount the debtor owes you. This is because you are only entitled to recover an outstanding amount from the debtor after your claim has been established by the court.

In February 2022, a court granted leave to levy attachment on an NFT for the first time in the Netherlands. Therefore, levying an attachment on an NFT also appears to be possible in civil cases. Although this will require the cooperation of the debtor. After all, only the debtor has the private digital keys, passwords or security codes with which the NFT can be transferred.

Of course, it also remains possible to have a prejudgment attachment imposed on other assets of your debtor, such as a bank account or a car.

Do you have any questions about levying a seizure or do you wish to levy a seizure? Please do not hesitate to contact us.

Janine van den Bemt

Janine van den Bemt

Lawyer

Janine is mainly active in the field of company and insolvency law.

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