Crypto Asset Seizure and Freezing
Procedure for seizure and freezing of cryptocurrencies in criminal investigations: custody, valuation and restitution to the victim or the State.
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Crypto asset seizure is a new legal scenario combining classical criminal procedure institutions (real precautionary measures, seizure, restitution) with the technical particularities of blockchain networks: private key custody, value volatility, transaction irreversibility. Both prosecution and defense must navigate this terrain with specialized technical advice for the seizure to be legally solid and economically effective.
Seizure Modalities
Direct seizure (Art. 127 CP) operates on crypto assets that are object or proceeds of the offense: for example, Bitcoin received in a scam or used in a bribery payment. Extended seizure (Art. 127 bis CP) affects assets acquired previously if there is disproportion with the convict's lawful income and a serious offense has occurred (drugs, terrorism, corruption, money laundering). Third-party seizure (Art. 127 quater CP) falls on crypto assets transferred to a third party who knew or should have known their illicit origin: typically, nominee family members or third-party wallets used for concealment.
Custody and Valuation
Custody is the most delicate point. Three options exist: (1) Immediate conversion to fiat and consignment in judicial deposit account: protects against volatility but materializes losses if the asset appreciates; (2) Custody in institutional wallets under court or ONIF control, preserving the crypto asset; (3) Delegated custody in an accredited exchange under judicial order. The choice must be documented with technical and financial criteria, not improvised.
Precautionary Attachment and Timing
Before definitive seizure —which requires a judgment— the process allows the precautionary attachment of crypto assets (Art. 589 LECrim) to secure civil liability and an eventual seizure. Effectiveness depends on timing: when assets are at an exchange with seat or representation in Spain, a judicial order can immobilize them quickly; when they are in self-custodied wallets, material immobilization is unfeasible and the measure is redirected to a prohibition to dispose and to criminal liability for concealment.
Restitution to the Victim
Seizure does not always benefit the State: when there is an identified victim, the crypto assets —or their converted value— are allocated to restitution as ex delicto civil liability. The victim's defense should appear early so that their assets are not diluted among other creditors and to participate in the decisions on custody and timing of conversion, which directly affect the amount they will recover.
Penalty Chart
| Type / Scenario | Criminal Penalty |
|---|---|
| Definitive seizure | Loss of ownership of crypto assets in favor of the State or restitution to the victim as ex delicto civil liability. |
| Precautionary attachment (Art. 589 LECrim) | Immobilization during the case to secure civil liability and eventual seizure. |
| Fine proportional to seizable value | When material seizure is not possible (mixers, privacy coins), fine equivalent to the value of the assets. |
* Penalties shown are indicative. The actual penalty depends on case circumstances, applicable mitigating and aggravating factors.
Our Defense Strategy
Reconstructive Patrimonial Defense
Documentary reconstruction of the client's wealth to establish lawful traceability prior to the imputed offense.
Deferred Conversion Negotiation
Agree with the court for custody in institutional wallet without immediate conversion to preserve the asset's value.
Appeal Against Precautionary Attachment
Challenge for disproportionality or for insufficient circumstantial proof of nexus between asset and offense.
Crypto Fraud Defence: Scams, On-Chain Tracing, MiCA & Asset Seizure
Crypto-related criminal cases combine classical offences — fraud (Arts. 248-250 CP), money laundering (Art. 301 CP), tax fraud (Art. 305 CP) and criminal organisation (Art. 570 bis CP) — with the technical reality of blockchain: pseudonymous wallets, mixers, cross-chain bridges, stablecoins and DeFi protocols. There is no autonomous "crypto offence": prosecutors must fit the facts into an existing criminal type and prove the on-chain flow with admissible expert evidence. Defence therefore demands both criminal-law expertise and independent blockchain forensics.
Penalty Table: Crypto-Asset Offences
| Offence | Article | Description | Penalty |
|---|---|---|---|
| Basic crypto fraud | Arts. 248-249 | Deception inducing the transfer of crypto-assets (fake broker, fake platform) | 6 months – 3 years |
| Aggravated fraud | Art. 250 | Special gravity, multiplicity of victims or high amount | 1 – 6 years |
| Money laundering with crypto | Art. 301 | Concealing illicit origin via mixers, bridges or exchanges | 6 months – 6 years + fine |
| Crypto tax fraud | Art. 305 | Evaded quota over €120,000 per fiscal year (Form 721) | 1 – 5 years + fine |
| Computer damage / DeFi exploit | Art. 264 | Exploit damaging systems or data (smart-contract attack) | 6 months – 3 years |
| Criminal organisation | Art. 570 bis | Structured group running crypto fraud at scale | 2 – 8 years |
Key Defence Strategies
Independent Blockchain Counter-Expert
Chainalysis, Elliptic or TRM tracing graphs are interpretations, not certainties. An accredited own expert can challenge address clustering heuristics, mixer assumptions and the attribution of a wallet to a specific person.
Market Contingency vs. Deception
A loss is not a crime. Many crypto disputes are investment risk, protocol failure or contractual breach — civilly reproachable but criminally atypical. The defence isolates genuine deception (Art. 248) from ordinary market loss.
Good Faith & KYC Diligence
Documented KYC, lawful source of funds, Form 721 reporting and declared capital gains rebut the knowledge element of laundering and fraud. Willful blindness must be proven, not presumed.
Criminal-Tax Bifurcation
Voluntary tax regularisation can activate the Art. 305.4 CP exemption, while the administrative track (CNMV/SEPBLAC) is handled separately from the criminal process, where defences may diverge.
Key Case Law
The Supreme Court accepts that the appearance of a legitimate trading platform or broker can constitute the 'sufficient deception' of Art. 248: the victim's error is measured against the credibility of the staged operation, not against the abstract diligence of an expert investor.
On-chain tracing is valid evidence but subject to expert contradiction. Traceability of a flow to a wallet does not, by itself, prove the intent (dolo) of its holder; the prosecution must still establish knowledge and control.
Using undeclared crypto gains to make further investments may integrate self-laundering (Art. 301.1) in concurrence with tax fraud (Art. 305), creating double criminal exposure that the defence must dismantle element by element.
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