Civil Law and Crypto Exchange Insolvency Litigation in Europe

1. Introduction

Crypto-exchange insolvency litigation arises when a cryptocurrency exchange, wallet provider, broker, or other crypto-asset service provider becomes insolvent and customers seek to recover the digital assets or their monetary value.

The central civil-law question is:

Do the crypto-assets belong to the customers, or have they become part of the insolvent exchange's estate?

This question determines whether the customer can potentially obtain proprietary/restitutionary recovery or instead has only an unsecured monetary claim against the insolvency estate.

European law is still developing because property and insolvency law remain substantially national, while the EU has harmonised important aspects of cross-border insolvency and, through MiCA, the regulation of crypto-asset service providers. Academic analysis of the major crypto failures specifically identifies the unresolved interaction between customer ownership, contractual rights, commingling and insolvency priority. (OUP Academic)

2. The Fundamental Legal Problem

Consider:

Customer deposits 5 BTC with Exchange X.
Exchange X becomes insolvent.
Exchange X has only 2 BTC remaining.

The court must determine:

Question 1

Does the customer still own the 5 BTC?

Question 2

Were the 5 BTC transferred to the exchange?

Question 3

Were the assets held separately or commingled?

Question 4

Did the exchange have permission to use, lend, sell or rehypothecate them?

Question 5

What does the custody contract say?

Question 6

Can the customer identify and recover specific assets?

Question 7

If not, does the customer merely have a monetary claim?

These questions determine the customer's position in the insolvency distribution.

3. European Legal Framework

A. MiCA

The Markets in Crypto-Assets Regulation (MiCA) is now central to European crypto-asset services.

Article 70 specifically requires crypto-asset service providers that hold clients' crypto-assets or the means of access to them to make adequate arrangements to safeguard clients' ownership rights, particularly in the event of the service provider's insolvency, and to prevent the provider from using clients' crypto-assets for its own account. (ESMA)

This is extremely important.

MiCA therefore recognises that:

Customer crypto-assets ≠ automatically exchange assets.

However, MiCA does not completely harmonise European property law. The precise proprietary consequences of custody, commingling and insolvency continue to depend significantly on national law.

4. EU Cross-Border Insolvency Regulation

Regulation (EU) 2015/848 governs important aspects of cross-border insolvency within the EU.

Its principal concepts include:

centre of main interests (COMI);

main insolvency proceedings;

secondary insolvency proceedings;

applicable insolvency law;

recognition of insolvency proceedings;

powers of insolvency practitioners;

cross-border creditor participation.

Main proceedings generally belong in the Member State where the debtor's centre of main interests is located. (EUR-Lex)

The insolvency law of the State opening the proceedings generally governs the insolvency proceedings and their effects, subject to the Regulation's exceptions. (EUR-Lex)

For a multinational crypto exchange this can be extremely important.

5. Why Crypto Insolvency Is Different

Traditional insolvency normally deals with:

bank accounts;

securities;

physical goods;

receivables;

intellectual property.

Crypto-assets create additional problems because:

assets are intangible;

private keys control access;

one blockchain address may contain assets attributable to thousands of customers;

exchanges may use omnibus wallets;

customer balances may exist only as database entries;

tokens can be rapidly transferred;

assets can be converted into other tokens;

prices fluctuate dramatically.

Therefore:

Blockchain ownership + contractual rights + insolvency law + private international law may all interact.

6. Case Law

Case 1 — BitGrail, Tribunale di Firenze, Sezione Fallimentare, No. 18/2019, 21 January 2019

Importance

This is one of the most important European civil-law crypto-insolvency cases.

BitGrail was an Italian cryptocurrency exchange dealing in Nano/XRB and other cryptocurrencies.

The exchange suffered a massive loss of customer cryptocurrency and subsequently entered insolvency proceedings.

Court's approach

The Florence Bankruptcy Court recognised cryptocurrency as a “bene” (asset/property) capable of being the object of rights under Article 810 of the Italian Civil Code.

Thus, the court did not adopt the view that cryptocurrency was legally nonexistent merely because it was intangible.

The court nevertheless treated the relationship between the exchange and customers as an irregular deposit under Italian law.

The exchange had control over the crypto-assets and was able to deal with them.

Because the assets were handled collectively/indistinctly, customers could not simply claim particular units of cryptocurrency as their individually identifiable property. (OUP Academic)

Principle

Recognition of cryptocurrency as property does not automatically give the customer a proprietary claim in insolvency.

The method of custody and commingling can determine the result.

7. BitGrail and Commingling

The BitGrail decision is especially important for the distinction between:

Segregated custody

Customer A's assets are separately identifiable.

Omnibus custody

Thousands of customers' assets are held together.

If crypto-assets are fungible and commingled, identifying the customer's specific property can become extremely difficult.

The BitGrail analysis therefore demonstrates:

Property status → does not necessarily equal individual recovery.

The Italian proceedings treated the deposited cryptocurrency as becoming part of the exchange's estate because of the nature of the irregular deposit and the exchange's control/commingling arrangement. (OUP Academic)

8. Case 2 — WebCoin Solutions / Francesco Firano, Tribunale di Firenze, RGF No. 15/2019

The BitGrail collapse involved another Italian insolvency proceeding concerning WebCoin Solutions, operated by Francesco Firano.

The Florence court opened insolvency proceedings and customers were required to submit claims to the insolvency process.

A significant practical problem was the reconstruction of customer identities and balances because of deficiencies in the exchange's records and identification systems.

The insolvency administration ultimately treated customer claims substantially as monetary claims rather than permitting unrestricted recovery of specific cryptocurrency.

The case illustrates an important principle:

A customer's practical recovery can depend not only upon substantive ownership but also upon the exchange's records being capable of establishing the customer's entitlement.

The two related BitGrail insolvency proceedings therefore show the importance of:

customer identification;

blockchain records;

exchange databases;

proof of balance;

proof of ownership;

insolvency claims procedures. (CRYPTO AVVOCATO)

9. Case 3 — Re Gatecoin Ltd (in liquidation), [2023] HKCFI 914

Court

High Court of Hong Kong.

Classification

Comparative common-law authority, not a European civil-law decision.

It is nevertheless highly useful because it directly addresses crypto-exchange insolvency.

Gatecoin operated a cryptocurrency exchange and was wound up.

The liquidators asked the court to determine whether cryptocurrency was property and whether customer crypto-assets were held on trust.

Holding

The court held that cryptocurrency constitutes property and is capable of being held on trust.

However, the particular contractual and factual arrangements did not establish a trust for the relevant customer group under the applicable terms. Consequently, some customers were left with contractual rather than proprietary claims. (hk-lawyer.org)

Principle

The legal classification of the cryptocurrency is only the first step; the custody contract determines whether customers actually possess proprietary rights against the insolvency estate.

10. Case 4 — Ruscoe v Cryptopia Ltd (in liquidation), [2020] NZHC 728

Court

High Court of New Zealand.

Classification

Comparative common-law authority.

Cryptopia was a cryptocurrency exchange that suffered a major hack and entered liquidation.

The court had to determine whether the cryptocurrency held by Cryptopia was:

company property, or

property held for customers.

Holding

The court held that cryptocurrencies constituted property and were capable of being held on trust.

The court concluded that the cryptocurrencies were held on separate trusts for customers, organised according to the relevant types of cryptocurrency. (insol-europe.org)

Therefore, the relevant assets were not simply ordinary company assets available for distribution to general creditors.

Principle

Segregated beneficial interests can protect crypto customers from ordinary insolvency claims.

This produces an important contrast with BitGrail.

11. BitGrail vs Cryptopia

This comparison demonstrates why custody architecture matters as much as the abstract classification of cryptocurrency.

12. Case 5 — In re Celsius Network LLC, 647 B.R. 631 (Bankr. S.D.N.Y. 2023)

Classification

Comparative US bankruptcy authority.

Celsius operated cryptocurrency lending and investment services.

The principal issue was whether cryptocurrency held in customer Earn Accounts belonged to the customers or Celsius.

Holding

The Bankruptcy Court held that the applicable Terms of Use clearly transferred title and ownership of the relevant digital assets to Celsius.

Consequently, the crypto-assets remaining in the Earn Accounts at the bankruptcy date became property of the Celsius bankruptcy estates.

Customers therefore had creditor claims rather than proprietary ownership of those assets. (FindLaw)

Principle

Contractual title-transfer language can determine whether customer crypto-assets become part of an insolvency estate.

13. Importance of Celsius for European Civil Law

Celsius is not binding on European courts.

However, it provides an important comparative lesson:

“Custody” does not necessarily mean “customer ownership.”

The court examined the precise Terms of Use.

Therefore, European courts may similarly have to examine:

title-transfer clauses;

lending clauses;

rehypothecation provisions;

omnibus custody provisions;

right-to-use provisions;

withdrawal provisions;

insolvency clauses.

But the ultimate answer in a European case must come from the applicable European/national property and insolvency law.

14. Case 6 — Re Gatecoin Ltd (in liquidation), [2025] HKCFI 493

This later Gatecoin decision concerns the distribution of recovered cryptocurrency in the liquidation.

It is useful because it demonstrates that crypto-insolvency litigation does not end once the court decides that cryptocurrency is property.

A second stage remains:

Who is entitled to the recovered crypto-assets and in what priority?

The 2025 decision further developed the treatment of proprietary/trust claims and distribution in the Gatecoin liquidation. (HK Case Law)

Principle

Crypto insolvency has two distinct stages:

determining ownership/proprietary rights;

distributing recovered assets according to those rights.

15. Case 7 — Wilden v Person Unknown & Anor, [2026] EWHC 1355 (KB)

This 2026 English decision involved Bitcoin originally purchased through EuropeFX, which subsequently ceased operating, leaving the claimant unable to recover the Bitcoin held on the platform. (Bailii)

The case illustrates a different problem:

What happens when a crypto platform disappears without a straightforward insolvency distribution mechanism?

It demonstrates the practical importance of:

identifying the original platform;

establishing the customer's balance;

tracing the crypto-assets;

identifying persons responsible;

establishing the legal route to recovery.

It is a comparative common-law authority, but relevant to European crypto-exchange failures.

16. Case 8 — Smithers & Anor v Persons Unknown Category 1 & Ors, [2026] EWHC 1907 (Comm)

This 2026 English decision is particularly useful for understanding the distinction between different types of crypto-assets.

The court considered Bitcoin, USDC and Ethereum.

It found that Bitcoin transaction outputs could remain individually identifiable, whereas fungible assets such as USDC and Ethereum could present different tracing issues after transfer and receipt. (Bailii)

Principle

Not all crypto-assets present identical proprietary or tracing problems.

This is highly relevant to insolvency.

A court should not automatically assume that:

Bitcoin = Ethereum = USDC

for purposes of property identification.

17. Why the Type of Crypto-Asset Matters

Different crypto-assets have different technical structures.

Bitcoin

UTXO-based structure can allow particular transaction outputs to remain identifiable.

Ethereum

Account-based architecture operates differently.

Stablecoins

They may be highly fungible and transferred between addresses without physical segregation.

Therefore:

Technical structure → evidentiary consequences → proprietary consequences.

The 2026 Smithers decision illustrates this distinction. (Bailii)

18. The European Civil-Law Problem of Ownership

European civil-law systems traditionally ask:

What legal object is capable of ownership?

For crypto-assets, the court may need to determine whether the token qualifies as:

property;

an intangible asset;

a sui generis asset;

a contractual right;

a claim;

another legally protected object.

The Italian BitGrail decision is particularly important because it expressly treated cryptocurrency as a “bene” under Article 810 of the Italian Civil Code. (Associazione Blockchain Italia)

Thus, civil law does not necessarily require physical possession before recognising legal protection.

19. Ownership vs Contractual Claim

This is the most important distinction in crypto insolvency.

Proprietary claim

Customer says:

“Those 5 BTC belong to me.”

If successful, the customer may seek:

restitution;

recovery;

segregation;

tracing;

exclusion from the insolvency estate.

Personal claim

Customer says:

“The exchange owes me the value of 5 BTC.”

The customer ordinarily participates as a creditor according to applicable insolvency priorities.

Formula

Proprietary claim → asset recovery

Personal claim → insolvency distribution

20. Segregated vs Omnibus Wallets

Segregated wallet

Customer A's assets are kept separately.

This may facilitate:

identification;

ownership proof;

restitution;

segregation from the estate.

Omnibus wallet

Assets of thousands of customers are pooled.

This creates:

commingling;

identification problems;

allocation disputes;

tracing difficulties.

BitGrail is the leading European example showing how omnibus handling can undermine customer attempts to recover specific crypto-assets. (OUP Academic)

21. MiCA's Importance

MiCA Article 70 requires CASPs holding customer crypto-assets or access mechanisms to safeguard customers' ownership rights, particularly in insolvency, and to prevent the provider from using those assets for its own account. (ESMA)

This creates an important regulatory objective:

Customer assets should not simply disappear into the provider's balance sheet because the provider becomes insolvent.

But the practical civil-law mechanism still depends upon:

national property law;

custody contract;

segregation;

insolvency law;

identification of assets;

applicable conflict-of-laws rules.

22. Customer Assets Used by the Exchange

A particularly dangerous arrangement is:

Customer deposits crypto → exchange lends/rehypothecates crypto → exchange becomes insolvent.

The legal consequences may differ significantly from simple custody.

The court may ask:

Did ownership transfer?

Was the transaction a loan?

Was there permission to reuse assets?

Was there a contractual title transfer?

Were equivalent assets required to be returned?

Were assets segregated?

What happens under insolvency law?

The Celsius case demonstrates how a contractual title-transfer provision can radically alter the customer's insolvency position. (FindLaw)

23. Proof of Customer Ownership

A customer may need to prove:

account ownership;

identity;

wallet address;

transaction history;

deposits;

withdrawals;

token balances;

applicable terms and conditions.

Evidence may include:

blockchain transactions;

exchange account records;

screenshots;

emails;

KYC records;

wallet addresses;

transaction IDs;

custody agreements.

The BitGrail proceedings demonstrate how inadequate customer identification and exchange records can create major problems in determining creditor claims. (CRYPTO AVVOCATO)

24. Blockchain Evidence

Blockchain evidence has two opposite characteristics.

Advantage

Transactions are often publicly recorded.

Difficulty

The blockchain normally records:

wallet address → wallet address

rather than:

John Smith → Jane Smith

Therefore, blockchain evidence can establish movement of assets without necessarily establishing the legal identity of the person controlling the destination wallet.

25. Tracing in Insolvency

Suppose:

Customer BTC → Exchange wallet → Hacker wallet → Second exchange

The customer may attempt to trace the asset.

The court must determine:

whether the asset remains identifiable;

whether it was mixed;

whether it was exchanged;

whether substitute assets can be identified;

whether the claimant has sufficient evidence.

Recent comparative authorities show that different crypto-assets can create different tracing problems. (Bailii)

26. Valuation of Crypto Claims

Another major insolvency problem is:

When should cryptocurrency be valued?

Suppose:

1 BTC = €20,000 at insolvency;

1 BTC = €50,000 six months later.

Should the customer receive:

€20,000?

€50,000?

1 BTC?

a percentage distribution based on the value at another date?

Different insolvency systems may answer differently.

The BitGrail proceedings demonstrate the importance of the valuation date, while comparative crypto insolvency cases such as Mt. Gox and Celsius illustrate how valuation timing can substantially alter creditor recovery. (Cambridge University Press)

27. In-Kind Recovery vs Cash Recovery

There are two fundamentally different remedies.

In-kind recovery

Customer receives:

2 BTC

Monetary recovery

Customer receives:

€X representing the value of 2 BTC.

In-kind recovery may be preferable to a customer when the cryptocurrency has substantially appreciated.

But in-kind recovery becomes difficult if:

the exchange no longer possesses the asset;

the asset was sold;

assets were commingled;

the customer has only a contractual claim.

28. Pari Passu Principle

Where customers are ordinary unsecured creditors, the insolvency principle of pari passu becomes important.

Generally:

Creditors of the same class share according to the applicable insolvency distribution rules.

Therefore, a customer with a purely personal claim may compete with:

lenders;

suppliers;

service providers;

other unsecured creditors.

A proprietary claim can therefore be enormously more valuable than an unsecured claim.

29. Customer Protection vs Insolvency Estate

This creates the central conflict:

Customers argue

“These assets never belonged to the exchange.”

Insolvency practitioner may argue

“The exchange acquired ownership under the contract.”

Other creditors may argue

“If the customers are proprietary owners, fewer assets remain for general creditors.”

The court therefore has to determine title before distribution priority.

30. Cross-Border Insolvency

A crypto exchange may have:

headquarters in Germany;

registered office in France;

customers throughout the EU;

wallets held through third-party providers;

servers in several countries;

subsidiaries in Luxembourg;

banking relationships in another Member State.

The EU Insolvency Regulation uses the COMI to determine main insolvency jurisdiction. (EUR-Lex)

Main proceedings are generally recognised throughout participating Member States, while secondary proceedings can arise where an establishment exists. (EUR-Lex)

31. COMI and Crypto Exchanges

COMI can be particularly difficult for a crypto business.

A company may have:

registered office in one country;

management in another;

customers elsewhere;

technical infrastructure globally distributed.

The relevant question is not simply:

“Where is the blockchain?”

The blockchain has no ordinary physical headquarters.

Instead, the court looks at where the debtor regularly administers its interests in a way ascertainable by third parties.

32. Lex Concursus

Under the EU Insolvency Regulation, the law of the Member State where insolvency proceedings are opened generally governs the insolvency proceedings and their effects, subject to specific exceptions. (EUR-Lex)

Therefore:

Opening State → insolvency law

But:

Property rights → may involve separate conflict-of-laws questions.

This distinction is crucial in crypto cases.

33. Why EU Law Does Not Completely Solve the Problem

MiCA provides important custody safeguards.

The Insolvency Regulation provides cross-border procedural coordination.

But the EU has not created a complete unified European property law for crypto-assets.

Consequently, Member States can reach different results concerning:

ownership;

custody;

commingling;

co-ownership;

restitution;

proprietary claims.

The literature on BitGrail specifically highlights this continuing divergence between Member States' property-law systems. (OUP Academic)

34. Crypto Exchange Terms and Conditions

The Terms of Service can be decisive.

Important clauses include:

Ownership clause

“Customer retains ownership.”

Title-transfer clause

“Customer transfers title to the provider.”

Lending clause

“Provider may lend customer assets.”

Rehypothecation clause

“Provider may reuse customer assets.”

Segregation clause

“Customer assets are separately held.”

Insolvency clause

“Customer's remedy is limited to a monetary claim.”

Withdrawal clause

“Customer has the right to request return.”

The difference between these clauses can radically alter insolvency outcomes.

35. The BitGrail Lesson

BitGrail demonstrates that a customer cannot simply argue:

“I deposited cryptocurrency, therefore I automatically own the same cryptocurrency in the insolvency.”

The court must examine:

Nature of asset + custody relationship + control + commingling + applicable property law.

36. The Cryptopia Lesson

Cryptopia demonstrates the opposite possibility:

A carefully structured custody relationship can preserve customer proprietary interests.

The New Zealand court recognised trusts over the cryptocurrency holdings and treated customers as beneficiaries rather than ordinary unsecured creditors. (insol-europe.org)

37. The Gatecoin Lesson

Gatecoin shows that:

Even when cryptocurrency is clearly property, customers can still lose proprietary priority if the contractual and factual requirements for a trust or equivalent proprietary arrangement are not satisfied.

The case therefore makes the contract particularly important. (hk-lawyer.org)

38. The Celsius Lesson

Celsius demonstrates:

Contractual title transfer can move cryptocurrency from the customer to the platform and consequently into the bankruptcy estate.

Again, this is a US authority, not European precedent, but it provides an important warning about contractual drafting. (FindLaw)

39. Civil Remedies Available to Customers

Depending on national law, customers may seek:

1. Vindication/restitution

Recovery of the asset itself.

2. Declaration of ownership

Court declaration that the customer owns the cryptocurrency.

3. Segregation

Removal of customer assets from the insolvency estate.

4. Monetary damages

Compensation for loss.

5. Unjust enrichment

Recovery of value unjustly retained.

6. Tracing

Following assets through subsequent transactions.

7. Provisional measures

Freezing or preservation orders.

8. Insolvency claim

Admission as creditor where proprietary recovery is unavailable.

40. Role of the Insolvency Practitioner

The insolvency practitioner may need to:

identify customer balances;

identify wallet holdings;

preserve private keys;

secure wallets;

reconstruct transactions;

distinguish company assets from customer assets;

verify KYC information;

calculate claims;

investigate suspicious transfers;

recover misappropriated assets;

distribute assets according to legal priority.

Crypto insolvency therefore requires both legal and technical expertise.

41. Special Problem of Private Keys

Possession of a private key is not necessarily equivalent to legal ownership.

For example:

Exchange controls the private key → customer may nevertheless remain legal owner.

Conversely:

Customer has a wallet address → this does not necessarily prove legal ownership.

The court therefore has to distinguish:

technical control

from

legal title.

42. Hacking Before Insolvency

Many crypto insolvencies follow hacks.

The legal sequence can be:

Customer assets → exchange → hack → disappearance → insolvency

The court may then have to decide:

Did the customer retain ownership?

Did the exchange breach its custody obligations?

Did the hack destroy the assets?

Does the customer have a restitutionary claim?

Does the customer have only a damages claim?

Does the claim rank against the estate?

BitGrail illustrates how the loss of crypto-assets through exchange security failures can become inseparable from the subsequent insolvency process. (defensis.it)

43. Crypto Insolvency and Fraudulent Transfers

Another issue is whether, before insolvency, the exchange:

transferred customer assets to affiliates;

made preferential payments;

moved assets to insiders;

transferred assets below value;

concealed assets;

transferred cryptocurrency to offshore wallets.

Insolvency law may provide avoidance/recovery mechanisms.

The EU Insolvency Regulation specifically gives the insolvency court jurisdiction over actions deriving directly from insolvency proceedings and closely connected with them, including avoidance actions. (EUR-Lex)

44. Consumer Claims

Where customers are consumers, additional legal questions may arise concerning:

unfair terms;

transparency;

information duties;

consumer jurisdiction;

mandatory consumer protection.

However, consumer status does not automatically create proprietary ownership.

A consumer may still be an unsecured creditor if the contract and applicable property law produce that result.

45. Institutional Customers

Institutional customers may have:

negotiated custody agreements;

segregation agreements;

collateral arrangements;

security interests;

contractual governing-law clauses.

These may produce a different insolvency outcome from ordinary retail customers.

46. Important Comparative Table

Important: The first two are the principal European civil-law insolvency authorities. The remaining cases are comparative because direct European crypto-exchange insolvency jurisprudence remains relatively sparse.

47. Case-Law Comparison: The Three Major Models

Model 1 — Exchange ownership

BitGrail / Celsius-type result

Customer transfers title or assets become part of estate.

Result:

Customer = creditor.

Model 2 — Customer proprietary ownership

Cryptopia-type result

Customer retains beneficial/proprietary interest.

Result:

Customer = owner/beneficiary.

Assets can potentially be recovered outside ordinary creditor distribution.

Model 3 — Mixed outcome

Gatecoin-type situation

Some contractual groups may have proprietary protection while others may possess only contractual claims, depending on applicable terms and facts. (hongkong.dentons.com)

48. Key Legal Principles

Crypto-assets can constitute legally protected property.

Property status does not automatically establish customer ownership.

Custody contracts are extremely important.

Title-transfer clauses can determine insolvency outcomes.

Segregation strengthens proprietary claims.

Omnibus commingling can weaken or defeat specific recovery claims.

Technical control is not necessarily legal ownership.

Private keys and crypto-assets must be conceptually distinguished.

Blockchain records can establish transactions but not always legal identity.

Proprietary claims generally provide stronger protection than unsecured claims.

Customer assets may be excluded from an insolvency estate where proprietary rights are established.

Customers without proprietary rights may have to participate pari passu or according to applicable creditor priorities.

MiCA specifically requires CASPs to safeguard customer ownership rights in insolvency. (ESMA)

EU Insolvency Regulation determines cross-border jurisdiction and recognition but does not completely harmonise property law. (EUR-Lex)

COMI is central to determining the main EU insolvency forum.

Valuation date can substantially affect customer recovery.

In-kind recovery and monetary recovery are legally different remedies.

Crypto-assets may have different tracing characteristics depending on their technical design.

Regulatory breach and civil liability are distinct questions.

The applicable national property and insolvency law remains decisive.

49. Exam Problem Example

Facts

A French customer deposits 10 ETH with a German crypto exchange.

The exchange:

holds all ETH in one omnibus wallet;

has contractual authority to lend customer assets;

becomes insolvent in Germany;

has only 4 ETH remaining.

Legal analysis

Step 1 — MiCA

Was the exchange subject to the applicable MiCA custody obligations?

Step 2 — Contract

Did title remain with the customer?

Step 3 — Property law

Does French/German applicable property law recognise the customer's proprietary interest?

Step 4 — Segregation

Were the 10 ETH individually identifiable?

Step 5 — Commingling

Were customer assets mixed?

Step 6 — Insolvency

Are the 10 ETH part of the exchange estate?

Step 7 — Remedy

Can the customer recover ETH in kind or only claim money?

Step 8 — Cross-border insolvency

Which Member State has jurisdiction under Regulation 2015/848?

Step 9 — Distribution

If the claim is unsecured, what priority does the customer receive?

50. Ultra-Basic Revision Keywords

Crypto exchange → Insolvency → MiCA → CASP → Custody → Customer assets → Ownership → Property → Title → Contract → Deposit → Irregular deposit → Segregation → Omnibus wallet → Commingling → Private key → Blockchain → Tracing → Restitution → Proprietary claim → Personal claim → Unsecured creditor → Pari passu → Insolvency estate → COMI → Lex concursus → Cross-border insolvency → Valuation → In-kind recovery → Monetary recovery → Hack → Fraudulent transfer → Avoidance → Customer protection.

Conclusion

The central lesson of European crypto-exchange insolvency litigation is that recognising cryptocurrency as property is only the beginning. The decisive question is whether the customer has a proprietary right in the particular crypto-assets or merely a personal contractual claim against the exchange.

The Italian BitGrail litigation is especially important for European civil law because it recognised cryptocurrency as property but demonstrated how an irregular-deposit/omnibus custody structure and commingling can place customer assets within the insolvency estate. (OUP Academic) By contrast, comparative authorities such as Cryptopia demonstrate that segregated or trust-based custody can protect customers, while Celsius demonstrates how explicit contractual transfer of title can produce the opposite result. (insol-europe.org)

MiCA now strengthens the European regulatory expectation that crypto-asset service providers safeguard customer ownership rights specifically in the event of their own insolvency, but the ultimate proprietary and insolvency consequences remain significantly dependent on national civil and insolvency law. (ESMA)