Juridica: The Crypto Assets in Estonian Enforcement Proceedings

Crypto-assets are technologically decentralized and anonymous, making them difficult to monitor and regulate. The explosive growth of crypto-assets brings new challenges for lawyers. It is possible to store crypto-assets without intermediaries, but mostly service providers are used, with whom the assets are stored. In enforcement proceedings, the enforcement agent may need to enforce decisions related to crypto-assets or seize and sell crypto-assets.

The enforceable title concerning crypto-assets must take into account the technical characteristics of crypto-assets and the risks specific to the field. Upon enforcement it is important to secure the private key related to the hardware crypto-asset wallet, as there is otherwise significant risk of unauthorized transfer of the crypto-assets. To identify crypto-assets belonging to a debtor, it is possible to approach third parties and there are mechanisms in place to allow enforcement agents access to this information.

As part of the enforcement procedure, one must take into account the possibility that the number of debtors owning crypto-assets is increasing and different measures must be implemented to find hidden crypto-assets. In this way, it is necessary for enforcement agents to acquire the competence of handling, evaluating and organizing auctions with crypto-assets, because the probability of coming into contact with crypto-assets in one way or another increases over time.

The article by Vladislav Linko and Daniel Moppel, which was published in the University of Tartu Faculty of Law magazine Juridica, can be found here. The full article is published only in Estonian language.