Banking Law and Insolvency Treatment of Digital Assets in Spain

1. Introduction

Digital assets have become increasingly important in Spanish banking and financial law. They include cryptocurrencies, crypto-assets, tokenised financial instruments, digital tokens and other electronically represented assets capable of having economic value.

An important legal question arises when the owner of digital assets, a crypto-asset service provider, a financial institution, or another business holding such assets becomes insolvent:

How are digital assets identified, controlled, valued, recovered and distributed during Spanish insolvency proceedings?

Spain does not operate a completely separate insolvency system exclusively for crypto-assets. Instead, digital assets generally have to be fitted into the ordinary Spanish insolvency framework, particularly the Texto Refundido de la Ley Concursal (TRLC), while EU legislation such as the Markets in Crypto-Assets Regulation (MiCA) can affect the regulatory and custody aspects of crypto-assets.

The Spanish insolvency framework was substantially reformed by Law 16/2022, which implemented Directive (EU) 2019/1023 and modernised restructuring, insolvency and debt-discharge procedures.

A particularly important distinction is between:

(a) digital assets legally belonging to the insolvent debtor, and

(b) customers' digital assets merely held or administered by the debtor.

That distinction can determine whether the assets become part of the insolvency estate or should instead be returned to their true owners.

2. Meaning of Digital Assets

For insolvency purposes, the term “digital assets” can potentially cover several different types of property.

Examples include:

Bitcoin and similar cryptocurrencies;

crypto-assets regulated by MiCA;

asset-referenced tokens;

electronic-money tokens;

utility tokens;

tokenised securities;

tokenised contractual rights;

digital investment products; and

other transferable blockchain-based economic rights.

The legal treatment of each asset may differ.

For example, a token representing a financial instrument may be subject to securities legislation, while another crypto-asset may fall within MiCA.

Therefore, insolvency administrators cannot simply classify every blockchain-based asset as “cryptocurrency.”

They must determine the legal substance represented by the digital record.

3. Spanish Insolvency Law

The principal insolvency legislation is the Recast Insolvency Act (Texto Refundido de la Ley Concursal), approved by Royal Legislative Decree 1/2020 and subsequently substantially amended by Law 16/2022.

The legislation governs matters including:

declaration of insolvency;

composition of the insolvency estate;

creditor claims;

restructuring;

liquidation;

avoidance of transactions;

ranking of claims;

discharge of qualifying debts;

directors' responsibility; and

insolvency proceedings involving microenterprises.

Law 16/2022 sought, among other objectives, to make insolvency proceedings more efficient, facilitate restructuring of viable businesses and improve liquidation procedures.

Digital assets therefore normally have to be dealt with through these general insolvency principles.

4. Digital Assets as Part of the Insolvency Estate

When a debtor becomes insolvent, one of the first questions is what property belongs to the insolvency estate.

If cryptocurrency legally belongs to the debtor, its digital nature should not, by itself, prevent its economic value from being included in the estate.

For example:

A Spanish company owns Bitcoin worth €500,000.

The company becomes insolvent.

The fact that the Bitcoin exists through a distributed ledger rather than as money in a conventional bank account does not necessarily prevent it from representing an economically valuable asset available to the insolvency estate.

The insolvency administrator would therefore need to identify and properly administer that asset.

5. Ownership Is More Important Than Physical or Technical Possession

Digital assets create a particularly important distinction between:

technical control and legal ownership.

A crypto-asset service provider may control private keys associated with customers' assets without necessarily owning those assets.

This becomes crucial in insolvency.

Suppose a Spanish crypto custodian holds crypto-assets for 10,000 customers.

If the custodian becomes insolvent, it does not necessarily follow that every crypto-asset technically controlled by the custodian belongs to the custodian's insolvency estate.

The legal relationship between the customers and custodian must first be examined.

Important questions include:

Who legally owns the crypto-assets?

Are customer assets segregated?

Are they individually identifiable?

Did the customer transfer ownership to the platform?

Was the platform merely providing custody?

Can particular assets be attributed to customers?

What do applicable contractual and regulatory rules provide?

The answers can determine whether the customer seeks return of an asset or merely files an insolvency claim against the provider.

6. Importance of MiCA

Regulation (EU) 2023/1114 — the Markets in Crypto-Assets Regulation — creates an EU regulatory framework for crypto-assets that are within its scope.

MiCA is important to insolvency analysis because authorised crypto-asset service providers can perform services such as custody and administration of crypto-assets on behalf of clients.

The regulatory framework contains protections intended to distinguish customer assets from assets belonging to service providers.

This distinction becomes particularly important if a custodian enters insolvency.

Proper segregation and record keeping can make it significantly easier to determine whether particular digital assets belong to customers rather than the insolvent business.

7. Custody of Private Keys

Digital assets create practical problems that traditional assets do not always present.

Control over many crypto-assets depends on cryptographic credentials, particularly private keys.

An insolvency administrator may therefore discover that the debtor owns valuable crypto-assets but cannot immediately control them.

For example:

Blockchain record → wallet → private key → practical control

If the private key cannot be recovered, the economic value may become practically inaccessible even though the debtor may remain the legal owner.

This makes preservation of wallet information and access credentials an important insolvency-administration issue.

8. Identification and Inventory

An insolvency administrator normally has to establish the debtor's assets.

For digital assets, investigation may involve determining:

what digital assets exist;

which blockchain or system records them;

which wallets are associated with the debtor;

whether assets are held through custodians;

whether the debtor owns them or holds them for customers;

their value;

whether security rights exist;

whether previous transfers are challengeable; and

whether control can be securely transferred.

Digital assets can therefore create a substantial asset-tracing problem.

9. Valuation of Digital Assets

Valuation can be particularly difficult because many crypto-assets experience significant price volatility.

Suppose an insolvent company owns:

20 Bitcoin

At the beginning of proceedings those assets have one market value.

Several months later they may have a materially different value.

The administrator must therefore distinguish between:

legal valuation for insolvency purposes;

accounting valuation;

current market value; and

actual liquidation proceeds.

This is particularly important because creditor recoveries can be affected by changes in value before liquidation.

10. Liquidation of Digital Assets

Where digital assets properly belong to the insolvency estate, they may ultimately need to be realised to satisfy creditors.

The objective of liquidation is generally to convert estate property into value that can be distributed according to the legally established ranking of creditors.

Digital assets create additional issues because their markets can be:

highly volatile;

fragmented;

internationally accessible; and

technologically complex.

An administrator must therefore act consistently with the applicable insolvency procedure and duties rather than treating digital assets as a speculative investment portfolio.

11. Customer Assets Versus General Creditors

This is one of the most important questions in a crypto-platform insolvency.

Consider two situations.

Situation A — Customer remains owner

A platform merely safeguards a customer's crypto-assets.

If ownership remains with the customer and the assets are sufficiently identifiable, the customer may have a basis for seeking return of the assets rather than participating simply as an ordinary unsecured creditor.

Situation B — Customer has only a contractual claim

The contractual arrangement may instead have transferred ownership or created only an obligation requiring the platform to return equivalent assets.

In that situation, the customer's legal position may resemble that of a creditor.

The exact result depends on the legal structure of the arrangement.

Therefore:

Custody ≠ automatically ownership.

And equally:

A customer's account balance ≠ automatically proprietary ownership of specific crypto-assets.

12. Segregation of Client Assets

Segregation becomes extremely important in insolvency.

A regulated provider should maintain systems capable of distinguishing customer assets from its own assets where applicable law requires that separation.

Without proper segregation, insolvency proceedings may encounter difficult disputes concerning:

ownership;

tracing;

asset pools;

competing customer claims;

shortfalls; and

creditor classification.

MiCA's custody protections therefore have significance beyond ordinary financial regulation. They can materially affect what happens when a service provider fails.

13. Digital Assets Used as Security

Digital assets can also raise questions concerning secured transactions.

A debtor might use crypto-assets or tokenised rights as economic collateral.

In insolvency, the important questions become:

Was a legally valid security interest created?

What law governs it?

Was the security properly perfected or made effective against third parties?

What asset does the security actually cover?

What priority does the secured creditor possess?

How can the collateral legally be realised?

A technical ability to transfer a token does not necessarily establish a legally valid security interest.

14. Avoidance of Pre-Insolvency Digital-Asset Transfers

Spanish insolvency law contains mechanisms for challenging transactions detrimental to the insolvency estate in appropriate circumstances.

Digital assets do not inherently escape those rules.

Suppose a company approaching insolvency transfers valuable crypto-assets to a related party for inadequate consideration.

The fact that the transaction was executed on a blockchain does not necessarily protect it from insolvency-law scrutiny.

The administrator may need to examine:

when the transaction occurred;

who received the assets;

consideration received;

relationship between the parties;

effect on the estate; and

whether statutory requirements for avoidance are satisfied.

Blockchain records may sometimes make the movement of an asset technically visible even where the identity behind a wallet address requires further investigation.

15. Concealed Digital Assets

Crypto-assets can create difficulties where a debtor fails to disclose them.

An insolvency debtor cannot generally avoid insolvency rules simply by keeping wealth in a digital wallet rather than a traditional bank account.

Deliberate concealment may have consequences for:

insolvency classification;

debt discharge;

recovery proceedings;

directors' responsibility; and

potentially criminal liability, depending on the facts.

Spanish insolvency jurisprudence has long treated concealment, improper disposal and conduct aggravating insolvency as potentially serious matters. The Supreme Court has also distinguished actual insolvency from mere accounting imbalance and developed principles concerning culpable insolvency.

16. Cross-Border Problems

Crypto-assets are inherently capable of creating cross-border disputes.

A Spanish debtor might:

live in Spain;

use an exchange incorporated elsewhere;

hold tokens through infrastructure distributed across countries;

use a wallet provider established outside Spain; and

owe money to creditors in several EU states.

The EU Insolvency Regulation can therefore become important in determining matters such as jurisdiction, recognition and applicable insolvency rules.

The decentralised location of a blockchain does not automatically eliminate ordinary private-international-law principles.

17. Banks Holding Digital Assets

The issue is also important from a banking-law perspective.

A bank can potentially have exposure to digital assets through:

custody arrangements;

tokenised financial products;

loans involving digital-asset businesses;

investments;

payment arrangements;

collateral; or

services provided to crypto-asset firms.

If the customer becomes insolvent, the bank must determine the legal nature and priority of its claim.

If the bank or custodian itself becomes insolvent, questions of segregation, ownership and regulatory protection become even more important.

18. Case Law

A significant qualification is necessary before examining cases.

There is still limited reported Spanish higher-court case law dealing specifically with the distribution of cryptocurrency in an insolvency estate.

It would therefore be misleading to invent six supposedly direct Spanish “crypto insolvency” judgments.

The following cases instead provide relevant principles from Spanish and EU insolvency jurisprudence concerning insolvency estates, creditor rights, discharge, valuation, avoidance and financial-institution failure. Those principles can apply when the underlying asset happens to be digital.

Case 1 — Spanish Supreme Court, Judgment of 1 April 2014

The Spanish Supreme Court addressed the legal meaning of insolvency and culpable insolvency.

An important principle emerging from Spanish insolvency jurisprudence is that insolvency is not identical to a negative accounting balance.

A debtor can possess assets and still be insolvent if it cannot regularly satisfy due obligations.

Relevance to digital assets

A company cannot necessarily argue:

“We own valuable crypto-assets, therefore we are solvent.”

The relevant issue is whether those assets provide sufficient realisable resources to meet obligations as they become due.

A volatile or inaccessible digital asset may therefore require careful analysis when assessing actual insolvency.

Case 2 — Spanish Supreme Court, Judgment 214/2020, 29 May 2020

This Supreme Court case concerned culpable insolvency and responsibility for the insolvency deficit.

The Court considered conduct that generated or aggravated insolvency and the relationship between that conduct and responsibility for the resulting deficit.

Digital-asset relevance

The same underlying reasoning can matter if directors improperly transfer crypto-assets belonging to a financially distressed company.

The fact that the transferred property consists of tokens rather than conventional money does not remove the potential insolvency consequences of unjustified depletion of the debtor's estate.

Case 3 — CJEU Joined Cases C-289/23 and C-305/23, Corván and Bacigán

These proceedings originated from Spanish commercial courts and concerned Directive (EU) 2019/1023 and Spain's debt-discharge regime.

The Court examined, among other matters, the ability of Member States to exclude categories of debt from discharge and the requirements governing such exclusions.

Digital-asset relevance

The case demonstrates that insolvency consequences depend not only on what property the debtor owns but also on:

what liabilities exist;

how those liabilities are classified; and

whether they can ultimately be discharged.

A debtor owning cryptocurrency therefore remains subject to the ordinary legal framework governing discharge and creditor claims.

Case 4 — CJEU Banco Santander / Banco Popular Proceedings

The Banco Popular litigation arose from the resolution of Banco Popular Español and produced extensive EU litigation concerning the treatment of shareholders and creditors following resolution.

In the related CJEU proceedings, questions arose from the Spanish Supreme Court concerning the effects of EU bank-resolution legislation.

Digital-asset relevance

Bank resolution and ordinary corporate insolvency are different legal regimes.

Nevertheless, the Banco Popular litigation demonstrates a fundamental financial-law principle:

The legal classification of an investor's or customer's right determines how that person is treated when a financial institution fails.

That principle becomes equally important where financial institutions hold tokenised assets or crypto-related claims.

Case 5 — Del Valle Ruíz and Others v Single Resolution Board, Joined Cases T-302/20, T-303/20 and T-307/20

These proceedings concerned whether shareholders and creditors affected by the Banco Popular resolution were entitled to compensation.

The General Court dealt with the valuation and treatment of investors following financial-institution failure.

Digital-asset relevance

The case illustrates the importance of valuation in financial failure.

Digital assets make valuation even more complicated because market prices can change rapidly.

Consequently, valuation date and valuation methodology can materially affect the economic outcome of insolvency or resolution proceedings.

Case 6 — CJEU Case C-765/22 and Related Spanish Insolvency Proceedings

A Spanish reference from Palma de Mallorca arose from insolvency proceedings in which debtors challenged the inventory of assets and list of creditors prepared by insolvency administrators.

The proceedings directly concerned mechanisms within the Spanish Recast Insolvency Law for contesting the composition of the insolvency estate and creditor list.

Digital-asset relevance

The underlying procedural principle is particularly significant for cryptocurrency.

If an insolvency administrator lists crypto-assets as belonging to the debtor but another person claims ownership, the composition of the estate may become disputed.

Correct identification of the asset owner is therefore essential.

Case 7 — Forum Filatélico Insolvency

The insolvency of Fórum Filatélico became one of Spain's major insolvency proceedings.

Spanish courts dealt with issues including the company's financial position, serious accounting irregularities and responsibility for the insolvency.

The court considered that accounting records did not adequately reveal the company's true financial and patrimonial situation and ultimately classified the insolvency as culpable.

Digital-asset relevance

The lesson for businesses dealing with digital assets is significant.

Crypto-assets must not become an invisible balance sheet.

A company needs records capable of establishing:

existence of assets;

ownership;

transactions;

liabilities;

customer holdings; and

the company's true financial condition.

Poor crypto-asset accounting can therefore create insolvency-governance problems.

19. Insolvency Administrator's Role

An insolvency administrator dealing with substantial digital assets may need to perform several distinct functions.

First, identify the assets.

Second, establish legal ownership.

Third, obtain secure control where appropriate.

Fourth, distinguish customer property from estate property.

Fifth, determine an appropriate valuation.

Sixth, investigate suspicious historical transfers.

Seventh, preserve the assets against loss or unauthorised transfer.

Finally, realise estate assets according to the applicable insolvency procedure.

These functions combine traditional insolvency law with technological evidence and digital-asset regulation.

20. Example — Insolvent Spanish Crypto Custodian

Assume that a Spanish crypto-asset service provider holds:

€30 million of customers' crypto-assets

and

€4 million of crypto-assets belonging to the company itself.

The company becomes insolvent.

It would be incorrect simply to describe the insolvency estate as containing €34 million of crypto-assets.

The administrator must first establish ownership.

If the €30 million is legally customer property held under a qualifying custody structure, the customers may have proprietary arguments for recovering their assets.

The company's own €4 million, by contrast, can ordinarily form part of the property available for administration within the insolvency estate.

If records show only €25 million of customer assets when customers collectively should have €30 million, a difficult €5 million shortfall problem arises.

The legal consequences would depend on the contractual arrangements, regulatory requirements, ownership structure and applicable insolvency rules.

21. Tokenised Securities

Not every digital asset should be analysed as cryptocurrency.

A token may represent:

shares;

bonds;

debt claims;

fund interests; or

another financial instrument.

If the issuer becomes insolvent, the investor's position may therefore depend primarily upon the underlying legal instrument.

For example:

Token representing a bond → investor principally has a debt claim.

Token representing shares → investor principally holds an equity position.

The blockchain technology used to record the instrument does not automatically change the underlying priority of the legal right.

22. Priority of Claims

Spanish insolvency law establishes categories and priorities among creditor claims.

Digitalisation does not automatically create special priority.

A creditor does not become secured merely because its claim is recorded through blockchain technology.

Similarly, owning a token issued by the debtor does not necessarily make the holder the owner of a proportionate share of every asset belonging to the issuer.

The underlying legal relationship remains decisive.

23. Second-Chance Proceedings and Digital Assets

Spain's insolvency framework also contains debt-discharge mechanisms for qualifying natural persons.

The CJEU's Spanish references concerning Directive 2019/1023 demonstrate that Spain's rules on discharge continue to generate significant legal interpretation. In 2026, for example, a Spanish commercial court referred additional questions concerning the treatment of secured debt and discharge procedures to the CJEU in Cajamar Caja Rural, Case C-381/26.

Digital assets owned by an individual debtor must therefore be considered when establishing the debtor's economic position.

A debtor should not assume that cryptocurrency is outside insolvency proceedings simply because it is self-custodied.

24. Major Legal Problems

The insolvency treatment of digital assets in Spain can therefore be reduced to several major legal questions:

25. Banking-Law Significance

For Spanish banks, the insolvency treatment of digital assets matters even where the bank itself does not issue cryptocurrency.

Banks can become involved as:

creditors of crypto businesses;

custodians;

payment-service providers;

collateral holders;

counterparties;

lenders;

investors; or

providers of services connected with tokenised financial instruments.

Banks therefore need to understand both the regulatory status of a digital asset and its insolvency-law characteristics.

A technologically sophisticated product can still produce a very traditional legal question:

Who owns the asset, and who has priority when there is not enough value to satisfy everyone?

Conclusion

Spanish law does not treat digital assets as existing outside ordinary insolvency principles.

The Texto Refundido de la Ley Concursal, substantially reformed by Law 16/2022, provides the central insolvency framework, while EU legislation including MiCA affects the regulatory treatment and custody of many crypto-assets. Spain's reforms are designed to improve restructuring, liquidation and debt-discharge procedures.

In practice, the most important issue is often not whether an asset is “digital,” but its legal character.

If the digital asset belongs to the debtor, its economic value can generally be relevant to the insolvency estate. If the debtor merely holds identifiable assets for customers, ownership and segregation rules may support a different treatment. Tokenised securities must likewise be analysed according to the underlying rights they represent.

The key principles are therefore:

Digital form does not eliminate property law.

Technical control does not automatically establish legal ownership.

Blockchain transfer does not automatically establish a legally valid security interest.

Customer assets and company assets must be distinguished.

Digital assets owned by an insolvent debtor cannot simply be ignored because they exist outside a conventional bank account.

Spanish courts have not yet produced a large body of higher-court judgments dealing directly with crypto-assets in insolvency. Accordingly, the safest legal analysis combines established Spanish insolvency jurisprudence with the emerging EU regulatory framework rather than presenting unrelated cases as direct cryptocurrency-insolvency precedents.