Civil recovery of crypto-assets
As intangible movable assets, crypto-assets are governed by the legal framework applicable to this category of assets.
Contentious procedures relating to the seizure and recovery of intangible movable assets are therefore applicable to crypto-assets. However, the use of these procedures faces unprecedented challenges, directly linked to the very nature of crypto-assets.
The decentralized nature of the protocols on which most crypto-assets circulate, as well as the possibility of holding them directly and without an intermediary, complicates the methods for their identification and apprehension, since, in this case, the effectiveness of the seizure relies on the voluntary cooperation of the holder, particularly concerning the delivery of private keys.
Conversely, crypto-asset service providers (CASPs) have a crucial role to play in the recovery of these assets, when they pass through their platform, for example when converted into legal tender.
This article focuses on the conditions under which crypto-assets held through a third-party actor can be subject to a civil recovery procedure.
To learn more about the legal framework for the recovery of crypto-assets, ORWL has published a legal guide accessible from this page.
Implementing civil seizure mechanisms for crypto-assets
When a third-party custodian such as a CASP acts as a third-party depositary of crypto-assets, the implementation of a civil seizure becomes significantly more operational. Indeed, these intermediaries, subject to strict regulatory oversight, have an obligation to cooperate with judicial authorities, which greatly facilitates the location and placement under judicial control of the crypto-assets concerned.
In practice, once a CASP is identified as the third-party holder of the crypto-assets, several procedural levers can be activated for their recovery.
The evidential summary proceedings (référé probatoire) under Article 145 of the Code of Civil Procedure
As a preliminary matter, when the identity of the holder of the assets to be recovered remains unknown, a summary writ (assignation en référé) can be initiated against the CASP in order to obtain, whether in an adversarial or ex parte setting, the essential information for initiating recovery measures.
Indeed, the summary procedure provided for in Article 145 of the Code of Civil Procedure allows for obtaining an investigative measure before any action on the merits. It is particularly useful in the field of crypto-assets to request the production of documents or information, notably identification data held by exchange platforms, such as contact details, KYC documents, histories, and connection data.
The request for a conservatory attachment (saisie conservatoire)
Once this information is available or has been obtained, a conservatory attachment procedure can be requested to freeze the disputed crypto-assets pending an enforceable title.
In accordance with Article L.511-1 of the Code of Civil Enforcement Procedures, this measure can be authorized when there is serious evidence likely to characterize a risk of dissipation of the assets. This risk is particularly significant with crypto-assets, due to their immediate liquidity and ease of transfer.
The conservatory attachment then allows the CASP to be ordered to freeze the concerned crypto-assets and suspend operations on the targeted account. This measure is by nature provisional and aims exclusively to preserve the rights of the claimant pending a final decision.
Regarding the specific case of stablecoins circulating on their own addresses, including when they are not held by a CASP, their conservatory attachment may be considered as a claim or as intangible rights depending on the configuration.
Obtaining an enforceable title
The conservatory attachment constitutes only an intermediate step. It must imperatively be followed by an action on the merits aimed at establishing the claimant’s right over the disputed crypto-assets.This proceeding allows for obtaining a final judicial decision — judgment or order — establishing the existence of the claim or the right of ownership asserted, and setting the amount or the terms of restitution. This enforceable title constitutes the indispensable foundation for converting the conservatory attachment into an attachment for payment (saisie-attribution).
Regardless of any conservatory measure, the civil recovery of crypto-assets can be part of a classic civil dispute between perfectly identified parties. This is notably the case for contractual disputes, commercial litigation, disputes between partners, or civil liability actions, in which the existence of crypto-assets in the debtor’s patrimony is known or alleged.
In this scenario, the procedural strategy consists of directly seizing the judge on the merits in order to obtain a decision recognizing the existence of a claim or a right to restitution relating, in whole or in part, to crypto-assets. The judgment rendered then constitutes an enforceable title allowing the implementation of forced execution measures, without it having been necessary to resort to a conservatory attachment beforehand.
In parallel, within the framework of criminal proceedings, the title to be obtained can take two forms depending on the stage of the procedure: it is either a restitution order issued by the investigating judge or the Public Prosecutor, or, in the event of referral to the criminal court (tribunal correctionnel), a judgment ruling on the civil interests. In both cases, the decision allows a right over the crypto-assets to be asserted, acting as an enforceable title to obtain the return of the funds or their monetary equivalent.
