German Court Steals $25 million Worth Of Crypto And Escapes The Law

A German man, who had brazenly admitted to stealing $25 million worth of cryptocurrency from his friend's crypto wallet, will be getting away with his crime because of a major loophole in the country's criminal code.

The Braunschweig Higher Regional Court has also ruled the accused as not guilty of any crime, because there is not one law in the German legal framework that can bring charges on the fraudulent man.

According to the court documents, the defendant was helping his friend set up a crypto wallet for a project, which gave the suspect access to the 24-word seed phrase.

But instead of finishing what he was tasked to do, the defendant transferred the tokens from his friend's wallet into two separate wallets which he controlled.

Slipping Through The Law

But amazingly, there was no one law in the German legal framework that could really accurately pinpoint his incredulous crimes.

Under Section 242 of the German Criminal Code, theft is legally defined as the “taking of another’s movable property.”

However, because digital assets like Bitcoin and Ethereum lack any physical form and do not qualify as "things", the defendant cannot be charged for theft.

German prosecutors were also unable to rule the crime under computer fraud because the blockchain transfers do not count as "unauthorized data manipulation with intent to gain," since the network's decentralized nature makes it near-impossible to track the person behind the transaction.

Prosecutors also rejected the charge of falsifying evidentiary data because the blockchain transactions cannot be traced to a verifiable users.

Instead, the "data modification" was performed by the network operators, not the accused.

Legal Experts Call for Swift Reform

Although criminal prosecution faltered, legal experts believe the defendant may still face civil lawsuits, given the scale of the alleged theft.

The victim may seek financial recovery through civil courts, though such proceedings typically take longer and come with a different burden of proof.

Specialists from German crypto law firms have characterized the court’s decision as creating a “massive protection gap,” warning that millions in digital assets could now be stolen in Germany without immediate criminal consequence.

Experts predict that lawmakers will need to act quickly to expand theft and property laws, and to introduce specific crypto-related criminal statutes to close the loophole.

With digital assets playing an ever-greater role in global finance, this ruling is expected to accelerate legislative reforms in Germany, setting the stage for broader crypto governance measures in Europe.

Stakeholders within Germany’s blockchain industry are now pushing for urgent clarity and comprehensive legal frameworks to ensure digital asset holders receive the same protections as those with traditional property.