In recent news, Germany’s Regional Court, which is based in Dresden, has now decided to ban the act of freezing crypto holdings that are held in various digital asset exchanges. Public prosecutors can no longer freeze the crypto as the act has been deemed unlawful and has since been revoked.
The significant and historic ruling by the court announced that this ban shall be put into immediate effect and that any laws pertaining to 3rd party cryptocurrency confiscation and seizure will have to be revoked at once. Moreover, it was stated that any confiscation measures regarding crypto would be deemed inapplicable should the prosecution fail to adequately provide an unrefusable link to fraudulent or criminal activities and intent.
A history-making decision
It should be mentioned that this decision is not linked to any one particular case and is applicable to everyone across the country. Furthermore, the ruling is of the utmost significance regarding crypto in Germany as it is the very first time that an event of this magnitude has happened and is sure to shake things up even more.
A major reason as to why crypto tends to get frozen, to begin with, has to do with criminals often using the new digital asset class for undesirable and illegal activities, which usually bring both frustration and misery to many. While it is true that crypto trading has become immensely popular over the years, it must be said that these criminal elements have simultaneously increased as well, and so authorities and governments alike felt as if the option to freeze crypto holdings was necessary to avoid further losses.
The fact that cryptocurrencies also have an anonymous aspect and have been used for money laundering, tax evasion, and even financing terrorism did not help matters either. In order to put an end to such activities, regulators and law enforcement agencies began targeting the exchanges. Although the court has decided to outlaw the act of freezing crypto, the cryptocurrency exchanges are nonetheless very likely to remain as a prime target for the authorities.
20% of the funds to be used for crypto
Apart from the aforementioned ruling, there had been a new law that was recently introduced in Germany through which nearly 4,000 institutional funds (which accounted for nearly €2 trillion in AUM) were told to go ahead and allocate 20% of the respective portfolios in BTC as well as various other cryptocurrencies.
This Fund Location Act, or Fondsstandortgesetz, had been administered on the 1st of July.