02.06.2022 | crypto law
The so-called blockchain technology has been in use for more than ten years. Still, it remains a mystery to most.
Not only on a technical but also on a legal level, this topic is very complex. Precisely because a technical understanding of the system is a prerequisite for applying the existing laws to it and drafting new, more progressive laws, there are still many legal uncertainties in this area.
In normal trade with haptic goods, for example, questions regarding the rescission of a failed contract are largely regulated and there is increasing legal clarity due to the specification due to the numerous case law. But not in the areas where blockchain technology is used.
What is blockchain technology for?
This technology became known during the financial crisis of 2007/2008. Everyone tried to secure their fortune. Through Bitcoin-Blockchains at that time a safe and marketable intermediate exchange good, largely independent of state influences, should be created.
This independence is reflected in the system, among other things, as follows:
- The expenses of eg cryptocurrency units does not take place through government agencies, as is the case with normal money, but through private individuals
- The allocation of units does not take place via the known legal regulations for the acquisition of property, but takes place on the basis of technical regulations of the corresponding blockchain -> technical authorizations
In summary, the goal of blockchain technology can be described as ensuring that transactions are carried out securely without laws and state authority.
That doesn’t mean, however, that just because of such a goal, the regular laws don’t still apply Blockchain Transactions Find application. Transactions with cryptocurrencies such as Bitcoin, Ether, Litecoin and co. do not move outside the general laws.
terms about terms
The topic of blockchain technology has many terms of its own. The most important for understanding can be found here:
A blockchain is comparable to a register. Within this register there are consecutive entries which form a block as a unit. A great deal of information is stored in the various blocks. This information is mostly related to transactions.
The blockchain is said to be distinguished from other registers by its security against counterfeiting.
Wallets are to be distinguished from the blockchain. This term only refers to a technical tool with which the data from a blockchain can be processed in a user-friendly manner and can be viewed and managed by its user in the same way as with online banking.
A somewhat better-known term is the “coin”. The hype surrounding Bitcoin has brought this term to the public. But what exactly does the term coin mean?
Coins can be seen as digital money. They function as a store of value and are used, among other things, as a means of payment for goods or services. A coin is always based on its own blockchain.
The token is less well known than the coin. Tokens can be used in more ways than coins. They can also serve as a means of payment, just like a coin. However, they can also continue to serve as authorization or represent property rights as part of a blockchain, such as for real estate. In contrast to coins, however, tokens are built on an already existing blockchain.
Types of blockchains
There are two different types of blockchains. Declaratory (determining) blockchains and constitutive (reasoning) blockchains.
A declaratory blockchain refers to a fact of life outside of the blockchain. So it’s not just based on purely digital circumstances. For example, it can be about someone’s ownership of something that actually exists. There are therefore extrinsic tokens before. Consequently, only part of reality is reflected and ascertained. An entry in the blockchain does not change reality, but reality indicates the content of the blockchain. If, for example, another owner is entered in the blockchain, this does not automatically mean that it corresponds to the actual circumstances.
The situation is different with constitutive blockchains. These blockchains deal with purely virtual issues. The most common example is the assignment of a cryptocurrency unit. This is intrinsic tokens, which generate their value solely from the blockchain itself. The owner of bitcoins, for example, can only be the owner who is stored as such in the blockchain. Since there is no reference to non-virtual circumstances, this information is always correct, since the property as the owner results solely from the information stored.
Put simply, if a blockchain does not contain the information that a person is the owner of the corresponding cryptocurrency unit, then he is not either.
Can I reclaim crypto assets via § 812 BGB?
If someone sees themselves as the legal owner of crypto assets and contractual regulations no longer help, you end up in the area of unjust enrichment according to Sections 812 et seq. of the German Civil Code (BGB). But is a refund possible?
The basic case of § 812 I BGB requires that someone has obtained something through the performance of another and this without a legal reason for it or in any other way at the expense of another.
In the case of a reversal under unjust enrichment law Blockchain transactionlike the retransmission of crypto assets, the following applies:
- “Obtained” is the blockchain position of the acquirer in terms of technical eligibility
- The position can be released as long as the enriched person can dispose of the specified amount
- Compensation for lost value according to § 818 Section 2 of the German Civil Code can only be considered if there is no longer any such entitlement
And what about the cancellation rules?
The regulations for reversal according to §§ 346 ff. BGB are very similar to those for unjust enrichment:
- Here, too, the relevant service received consists of the blockchain position of the acquirer
- Compensation for lost value is only paid once the purchaser has lost his entitlement, not simply because of the nature of what has been acquired
In the case of reversal through in rem restitution, the following must be observed:
- The replacement within the meaning of § 249 paragraph 1 BGB is in the reversal of transactions with regard to units of cryptocurrencies not limited to a specific unit
- There is a limit for the replacement by monetary compensation in the impossibility or disproportionality from § 251 BGB
SBS LEGAL – Crypto Law Attorney
Based on many years of experience, our specialized lawyers will advise you professionally and competently and assert your interests both in and out of court.
If you are faced with relevant legal issues, we look forward to hearing from you at any time.
Your SBS LEGAL team
If you have any further questions, please do not hesitate to contact us by phone at any time. Would you like legal advice from the experienced team of specialist lawyers and specialists at SBS LEGAL?
The first contact with SBS LEGAL is always free of charge.
SBS Direct contact
Back to blog overview