Civil Law and Virtual Economy Commercial Litigation in Europe

1. Introduction

The virtual economy refers to commercial activity conducted through digital platforms, virtual environments, online marketplaces, blockchain networks, virtual worlds, cryptocurrencies, NFTs, digital assets, cloud-based services, online games, metaverse environments and other digitally mediated economic systems.

Commercial litigation in the virtual economy is therefore no longer confined to traditional disputes over physical goods and services. European courts increasingly encounter disputes involving:

cryptocurrencies and digital assets;

NFTs;

virtual currencies in online games;

virtual land and virtual goods;

blockchain transactions;

smart contracts;

digital platforms;

online marketplaces;

digital payment systems;

token sales;

virtual-property ownership;

platform accounts;

algorithmic trading;

digital fraud;

intellectual property in virtual environments;

consumer and commercial contracts;

data-related economic disputes;

insolvency involving digital assets.

The central civil-law question is:

How should traditional principles of contract, property, tort, unjust enrichment, restitution, damages and commercial liability apply to economically valuable digital assets and transactions?

European law generally does not create a completely separate "virtual economy civil law." Instead, traditional private-law principles are increasingly being applied to new forms of digital property and commerce.

2. What Is Virtual Economy Commercial Litigation?

A virtual-economy commercial dispute arises when a digitally mediated transaction produces a disagreement concerning:

ownership;

payment;

contractual performance;

fraud;

intellectual property;

digital assets;

platform obligations;

liability;

unjust enrichment;

damages.

Example

A company purchases 100 NFTs from a digital platform.

The platform subsequently:

deletes the user's account;

refuses access to the NFTs;

changes the terms of service;

transfers the assets to another wallet.

The company may seek:

declaration of ownership;

specific performance;

restitution;

damages;

injunction.

The court must first determine what legal rights the buyer actually acquired.

3. Main Categories of Virtual-Economy Litigation

European commercial disputes can be divided into several categories.

A. Cryptocurrency disputes

Examples:

Bitcoin ownership;

stolen cryptocurrency;

exchange insolvency;

cryptocurrency payment;

crypto fraud;

wallet disputes.

B. NFT disputes

Examples:

ownership;

unauthorized minting;

copyright infringement;

fraudulent sales;

platform disputes.

C. Virtual-world disputes

Examples:

virtual land;

virtual buildings;

avatars;

virtual goods;

virtual currencies.

D. Smart-contract disputes

Examples:

coding errors;

automated execution;

failed transactions;

oracle manipulation.

E. Digital-platform litigation

Examples:

account suspension;

marketplace disputes;

platform commissions;

algorithmic decisions;

seller-buyer disputes.

F. Digital-asset insolvency

Examples:

exchange bankruptcy;

customer ownership;

segregation of assets;

tracing.

4. European Legal Framework

Virtual-economy litigation in Europe is governed by several overlapping legal regimes.

4.1 Contract law

Contracts remain fundamental.

Digital transactions may be governed by:

national contract law;

electronic-commerce rules;

platform terms;

smart contracts;

subscription agreements;

token purchase agreements.

4.2 Property law

The difficult question is whether a digital asset constitutes legally recognizable property.

Traditional property law developed around:

land;

physical goods;

tangible assets.

Digital assets challenge those assumptions because they may be:

intangible;

decentralized;

transferable;

pseudonymous;

recorded on distributed ledgers.

4.3 Tort law

Tort/delict law may become relevant to:

hacking;

unauthorized transfers;

negligent cybersecurity;

fraudulent digital transactions;

platform negligence.

4.4 Unjust enrichment

Suppose:

Person A accidentally transfers €500,000 worth of cryptocurrency to Person B.

The recipient may be required to restore the benefit under applicable unjust-enrichment principles.

4.5 Intellectual property

Virtual assets frequently incorporate:

images;

music;

software;

trademarks;

designs;

fictional characters.

Ownership of a token does not necessarily mean ownership of the underlying intellectual property.

5. Case Law 1 — AA v Persons Unknown [2019] EWHC 3556 (Comm)

This is one of the foundational European cryptocurrency cases.

The claimant was the victim of a cyberattack and cryptocurrency was transferred to the attackers.

The English High Court considered whether Bitcoin could constitute property for the purposes of proprietary remedies.

The court concluded that cryptocurrencies could be treated as property for the relevant legal purposes.

Importance

This was a major development because property law traditionally focuses on tangible objects and certain recognized intangible rights.

The decision supported the proposition that cryptocurrency can potentially be:

property;

the subject of a proprietary injunction;

capable of being traced;

recoverable through equitable remedies.

Commercial significance

Suppose a business's cryptocurrency is stolen.

A proprietary claim can potentially be stronger than an ordinary damages claim because the claimant may seek:

recovery of the specific digital asset.

This becomes particularly important where the cryptocurrency has increased substantially in value.

6. Case Law 2 — Tulip Trading Ltd v Bitcoin Association for BSV & Others

The Tulip Trading litigation is one of the most important European cases concerning cryptocurrency and blockchain infrastructure.

Tulip Trading claimed that it controlled substantial Bitcoin-related assets but had lost access to the relevant private keys.

It argued that developers of the relevant blockchain networks owed duties requiring them to assist in restoring access.

The central legal question was whether blockchain developers could owe fiduciary or tortious duties to cryptocurrency owners.

The litigation therefore addresses a fundamental virtual-economy question:

Can decentralized software developers owe legal duties to users of a blockchain?

The English Court of Appeal allowed the claimant's case to proceed on the basis that it was sufficiently arguable that the developers could owe fiduciary duties in appropriate circumstances.

Commercial importance

If such duties ultimately arise, blockchain developers could potentially face legal responsibility concerning:

lost private keys;

digital-asset recovery;

protocol changes;

security vulnerabilities;

conflicts of interest.

The case demonstrates how traditional fiduciary concepts may be tested by decentralized technology.

7. Case Law 3 — Ion Science Ltd v Persons Unknown

This English Commercial Court litigation involved cryptocurrency fraud and tracing.

The claimants alleged that they had been deceived into transferring cryptocurrency.

The court considered:

cryptocurrency tracing;

proprietary claims;

injunctions;

service on persons unknown;

international enforcement.

Importance

Traditional commercial litigation assumes that defendants have identifiable names and addresses.

Cryptocurrency litigation creates a different situation:

The defendant may be identifiable only through a blockchain wallet address.

Courts have therefore had to develop procedural techniques for bringing claims against:

"Persons Unknown."

This is particularly important for digital fraud.

8. Case Law 4 — D'Aloia v Persons Unknown [2022] EWHC 1723 (Ch)

This is another major cryptocurrency litigation.

The claimant alleged that cryptocurrency had been fraudulently obtained and subsequently transferred through various wallets.

The High Court dealt with:

tracing;

constructive trust;

cryptocurrency transfers;

identification of recipients;

service through alternative methods.

The court permitted service of proceedings by NFT sent to the relevant wallet, alongside other methods.

Why the case matters

This illustrates the procedural flexibility required by virtual-economy litigation.

Traditional civil procedure normally assumes:

address → defendant → service.

Cryptocurrency disputes may instead involve:

wallet address → blockchain transaction → unknown holder.

The case therefore demonstrates how civil procedure can adapt to decentralized commerce.

9. Case Law 5 — ByBit Fintech Ltd v Persons Unknown

The English courts have also dealt with disputes involving cryptocurrency exchanges and unidentified recipients.

The litigation concerned cryptocurrency transactions and the use of proprietary remedies against persons unknown.

Significance

It demonstrates the increasing importance of:

freezing injunctions;

proprietary claims;

asset tracing;

exchange cooperation;

blockchain analytics.

The underlying principle is that the anonymity of blockchain transactions does not necessarily make civil remedies impossible.

10. Case Law 6 — Robertson v Persons Unknown [2019] EWHC

This line of English cryptocurrency litigation concerned claims involving digital assets and fraud.

The courts examined whether cryptocurrency could support proprietary remedies and how traditional civil-law concepts should apply to assets held through blockchain technology.

Significance

The broader principle emerging from these cases is:

The technological form of an asset does not necessarily determine whether ordinary property remedies are available.

11. Case Law 7 — B2C2 Ltd v Quoine Pte Ltd

Although decided by the Singapore courts rather than a European court, this case is highly influential in comparative virtual-economy commercial law.

The dispute involved cryptocurrency trading and algorithmic transactions.

A software malfunction caused trades to execute at highly abnormal prices.

The court considered:

automated contracts;

algorithmic execution;

contractual intention;

mistake;

good faith;

smart-contract-like transactions.

European relevance

The case provides a useful comparative framework for European courts confronted with:

"The computer did it"

arguments.

A party cannot necessarily avoid contractual responsibility merely because an algorithm executed the transaction.

12. Case Law 8 — Quoine and Algorithmic Contracting: European Relevance

Although B2C2 v Quoine is not a European authority, its reasoning is particularly relevant to European virtual-economy litigation because automated trading systems increasingly perform contractual transactions without human intervention.

European courts may need to decide:

whether algorithmic conduct constitutes acceptance;

whether an automated mistake invalidates a transaction;

whether a smart contract is a contract;

who bears programming risk;

whether code overrides written contractual terms.

13. Case Law 9 — CJEU, Skatteverket v Hedqvist, C-264/14

This is one of the most important EU cryptocurrency cases.

The case concerned the VAT treatment of transactions involving Bitcoin.

The CJEU held that exchanging traditional currency for Bitcoin, and vice versa, could fall within the VAT exemption applicable to transactions concerning currency, banknotes and coins used as legal tender.

Importance

The Court recognized that Bitcoin could function economically as a means of payment even though it was not legal tender in the traditional sense.

This was a significant European legal recognition of cryptocurrency's economic function.

Commercial significance

The case demonstrates that EU law can classify cryptocurrency according to its economic function, rather than relying exclusively upon traditional legal categories.

14. Case Law 10 — CJEU, Digital Rights Ireland Ltd v Minister for Communications, C-293/12

This is not a cryptocurrency case, but it is relevant to virtual-economy litigation because digital commerce depends heavily upon data.

The CJEU addressed the proportionality of extensive data-retention obligations.

The Court emphasized:

privacy;

data protection;

proportionality;

fundamental rights.

Commercial significance

Virtual-economy businesses frequently depend upon:

user data;

transaction histories;

wallet information;

identity verification;

behavioral data.

Therefore, data protection can become part of commercial litigation involving digital platforms.

15. Case Law 11 — CJEU, Google Spain, C-131/12

The Google Spain judgment established important principles concerning online personal data and search engines.

The case concerned the relationship between:

privacy;

search engines;

personal data;

online information.

Virtual-economy relevance

Digital businesses can face litigation concerning:

data processing;

reputation;

online profiles;

platform information;

user accounts.

The case demonstrates that the virtual economy operates within the broader European framework of fundamental rights and data protection.

16. Case Law 12 — CJEU, Schrems II, C-311/18

The CJEU's Schrems II judgment concerned international transfers of personal data.

Although not a virtual-asset case, it has major relevance for multinational digital businesses.

Virtual-economy companies frequently operate:

cloud platforms;

global marketplaces;

blockchain services;

digital wallets.

Where personal information crosses borders, data-protection rules can become an important source of civil and regulatory disputes.

17. Cryptocurrency as Property

One of the central legal questions is:

Is cryptocurrency property?

European courts increasingly recognize that digital assets can possess characteristics sufficient to justify proprietary remedies.

The logic is straightforward:

Cryptocurrency can be:

controlled;

transferred;

exclusively associated with a wallet;

economically valuable;

identifiable through blockchain records.

Consequently, traditional property remedies can potentially be adapted to cryptocurrency.

18. Ownership of Cryptocurrency

Ownership is more complicated than possession.

Suppose:

Wallet A transfers 10 Bitcoin to Wallet B.

The blockchain shows the transfer.

But the court must determine:

who controls Wallet B;

whether the transfer was authorized;

whether the private key was stolen;

whether the recipient holds the Bitcoin beneficially;

whether it is subject to a trust;

whether the recipient is a bona fide purchaser.

This creates substantial evidentiary challenges.

19. Private Keys

The private key is central to many cryptocurrency disputes.

A claimant may say:

“I own the Bitcoin.”

The defendant may respond:

“You don't control the private key.”

But legal ownership and technical control are not necessarily identical.

The Tulip Trading litigation illustrates precisely this tension.

20. Cryptocurrency Theft

Consider:

Company A owns 50 Bitcoin.

A hacker obtains unauthorized access and transfers them to Wallet B.

Wallet B transfers them to:

Wallet C;

Wallet D;

an exchange;

another blockchain.

The claimant may seek:

proprietary injunction;

freezing injunction;

tracing;

disclosure orders;

exchange disclosure;

damages;

restitution.

21. Tracing Digital Assets

Blockchain technology can actually assist tracing because transactions are publicly recorded.

The difficulty is not necessarily:

“Where did the Bitcoin go?”

but:

“Who controls the wallet to which it went?”

Blockchain analytics may identify transaction flows, but the court may still require additional evidence connecting a wallet to a real-world person.

22. Persons Unknown

Virtual-economy litigation has popularized the procedural category:

Persons Unknown

This is extremely useful where:

hackers are anonymous;

wallet owners are unknown;

fraudsters use pseudonyms.

The D'Aloia litigation demonstrates how courts can adapt civil procedure to this environment.

23. Service Through Blockchain Technology

One of the most innovative developments has been the possibility of serving legal proceedings through:

NFT;

blockchain transaction;

digital wallet.

This reflects a broader principle:

Civil procedure must remain effective even where commercial actors operate through pseudonymous digital identities.

24. Smart Contracts

A smart contract is generally a computer program designed to execute contractual instructions automatically.

For example:

If A sends 1 ETH, transfer NFT X to A.

The legal problem is:

Is the code itself the contract?

The better analysis is often that there are two layers:

Legal contract

The parties' legally enforceable agreement.

Technical implementation

The computer code executing the agreement.

The two may correspond, but they do not necessarily have identical legal meaning.

25. Smart Contract Errors

Suppose a smart contract contains a programming error.

A buyer pays:

€1,000.

But the code transfers:

€1,000,000 worth of tokens.

The seller may seek restitution.

Potential legal theories include:

mistake;

unjust enrichment;

breach of contract;

restitution;

unjustified enrichment;

cybersecurity negligence.

The fact that "the code executed automatically" does not necessarily answer the legal question.

26. Decentralized Finance

DeFi creates additional litigation problems.

A decentralized finance protocol may involve:

lending;

borrowing;

staking;

liquidity pools;

derivatives;

automated market makers.

If the protocol fails, users may claim:

breach of contract;

negligence;

unjust enrichment;

misrepresentation;

fiduciary breach.

But identifying the legally responsible person can be extremely difficult.

27. DAO Liability

A DAO is a decentralized autonomous organization.

Traditional corporations have:

directors;

shareholders;

legal personality.

A DAO may instead have:

token holders;

developers;

governance mechanisms;

smart contracts.

This raises a fundamental legal question:

Who is legally responsible when the DAO causes commercial harm?

Possible defendants may include:

developers;

identifiable operators;

governance participants;

legal entities controlling the protocol.

28. Tulip Trading and Developer Liability

The Tulip Trading litigation is especially significant because it asks whether developers can owe duties to blockchain users.

If courts recognize such duties, blockchain developers could potentially face claims involving:

cybersecurity;

asset recovery;

protocol design;

conflicts of interest.

The case therefore has potentially enormous implications for decentralized commerce.

29. Virtual Goods

Virtual goods include:

game skins;

weapons;

avatars;

digital clothing;

virtual land;

virtual buildings.

Their economic value can be substantial.

But ownership may depend upon the platform's terms of service.

For example:

“Users receive a revocable licence to use virtual goods.”

That wording can dramatically reduce the user's proprietary claim.

30. Virtual Currency in Online Games

Suppose a player purchases:

€10,000 of virtual currency.

The gaming company then closes the player's account.

Possible questions include:

Was the currency legally owned?

Was it merely a licence?

Was termination contractually permitted?

Was the account suspension lawful?

Is unused virtual currency refundable?

These disputes combine:

contract law;

consumer law;

platform law;

digital-property questions.

31. NFT Ownership

An NFT is fundamentally a blockchain-based token.

Buying an NFT does not automatically transfer:

copyright;

trademark rights;

patent rights;

commercial exploitation rights.

The purchaser may own:

the token

without owning:

the underlying artwork.

This distinction is essential in commercial litigation.

32. NFT Copyright Litigation

Suppose an NFT depicts a famous character.

The seller may own the NFT but not the copyright.

If the seller commercially licenses the image, the copyright owner may claim:

infringement;

injunction;

damages;

account of profits.

Thus:

token ownership ≠ intellectual-property ownership.

33. Virtual Real Estate

Virtual worlds may sell:

plots;

buildings;

advertising spaces;

virtual stores.

The legal status of "virtual land" depends on:

platform terms;

token structure;

contractual rights;

applicable property law.

A court may decide that the user does not own land in the traditional legal sense, but instead owns a contractual licence or token.

34. Platform Liability

Digital platforms can become defendants where they:

suspend accounts;

freeze funds;

remove listings;

change algorithms;

terminate sellers;

fail to prevent fraud.

The platform's liability depends on:

contractual terms;

consumer legislation;

platform regulation;

negligence;

statutory duties.

35. Cryptocurrency Exchanges

Exchanges occupy an especially important position.

They may hold customer assets in:

omnibus wallets;

segregated wallets;

custodial accounts.

If an exchange becomes insolvent, customers may dispute:

Who owns the cryptocurrency?

Is it:

customer property;

company property;

trust property;

contractual claim?

The answer determines whether customers can recover specific assets or merely share in the insolvency estate.

36. Insolvency of Digital-Asset Platforms

Suppose an exchange holds:

€500 million of customer cryptocurrency.

The company becomes insolvent.

If customers have proprietary rights, they may seek:

return of the specific cryptocurrency.

If they merely have contractual claims, they may rank alongside other creditors.

Therefore, contractual terms concerning custody are enormously important.

37. Consumer vs Commercial Transactions

A distinction must be made between:

Consumer

An individual buying cryptocurrency or virtual goods for personal use.

Commercial investor

A company trading digital assets professionally.

Consumer protection rules can provide additional protections.

Commercial parties generally have greater contractual freedom.

38. Digital Fraud

Virtual-economy fraud can include:

fake token offerings;

phishing;

wallet theft;

fake investment platforms;

fake NFTs;

fraudulent smart contracts;

impersonation;

insider manipulation.

Civil remedies may include:

rescission;

restitution;

damages;

freezing injunctions;

proprietary injunctions;

tracing.

39. Unjust Enrichment

Suppose:

€2 million in cryptocurrency is transferred to the wrong wallet.

The recipient has received a benefit.

If there is no legal basis for retaining it, the claimant may seek restitution.

This is particularly important because blockchain transfers are often technically irreversible.

Legal restitution can operate even where the blockchain itself cannot reverse the transaction.

40. Irreversibility of Blockchain Transactions

A blockchain may say:

“Transaction completed.”

Civil law may say:

“The recipient must return the asset.”

Thus:

technical irreversibility ≠ legal irreversibility.

This is one of the most important concepts in virtual-economy litigation.

41. Damages in Cryptocurrency Litigation

Cryptocurrency valuation creates difficult questions.

Suppose:

10 Bitcoin were stolen;

Bitcoin was worth €20,000 each at theft;

Bitcoin later reached €60,000.

Should damages be:

€200,000;

€600,000;

value at judgment;

value at another legally relevant date?

The answer depends on:

cause of action;

property-law principles;

restitution;

mitigation;

national law.

This makes valuation evidence critical.

42. Mitigation

A claimant may have a duty to mitigate loss.

Suppose:

10 Bitcoin are stolen.

The claimant knows immediately.

If the claimant does nothing while the value collapses, the defendant may argue:

“The claimant failed to mitigate.”

Conversely, if the claimant reasonably waits for tracing or recovery, different considerations may apply.

43. Intellectual Property in the Virtual Economy

Virtual commerce often involves:

trademarks;

copyrights;

designs;

software;

trade secrets.

Potential disputes include:

“Who owns the virtual product?”

and:

“Who owns the IP underlying the virtual product?”

The answers may be different.

44. Trademark Infringement in Virtual Worlds

A company may discover that its trademark is used in:

a virtual shop;

NFT collection;

metaverse environment.

It may seek:

injunction;

damages;

removal;

transfer of domain/token;

account information.

Traditional trademark principles can therefore extend into virtual commercial environments.

45. Data as a Commercial Asset

Virtual businesses rely heavily on:

user profiles;

transaction histories;

behavioural data;

biometric data;

wallet information.

Misuse of this data may produce:

regulatory penalties;

contractual claims;

privacy claims;

damages.

The Google Spain and Schrems II jurisprudence illustrates the importance of data protection within European digital commerce.

46. Algorithmic Commercial Decisions

A virtual platform may automatically:

suspend accounts;

determine prices;

rank sellers;

approve transactions;

detect fraud.

This creates questions about:

transparency;

contractual fairness;

negligence;

discrimination;

explainability;

procedural fairness.

The legal system increasingly has to determine how responsibility is allocated when no individual employee directly made the decision.

47. Jurisdiction

Virtual transactions can involve:

buyer in France;

seller in Germany;

platform in Ireland;

blockchain nodes worldwide;

exchange in another jurisdiction.

Which court has jurisdiction?

Potential connecting factors include:

defendant's domicile;

place of performance;

place where damage occurred;

contractual jurisdiction clause;

consumer residence.

48. Applicable Law

Even if a European court has jurisdiction, it must determine:

Which country's law governs the dispute?

Potential candidates may include:

law chosen in the platform terms;

law applicable to the contract;

law applicable to tort;

law applicable to property rights.

This is particularly difficult for decentralized systems with no obvious geographical location.

49. Evidence and Blockchain

Blockchain evidence has significant advantages.

Transactions can often be:

timestamped;

independently verified;

cryptographically linked.

But blockchain evidence does not automatically prove:

who controlled a particular wallet.

The court may require additional evidence.

50. Smart-Contract Evidence

Technical experts may need to explain:

source code;

deployed bytecode;

oracle mechanisms;

transaction logs;

wallet control;

vulnerabilities.

Thus, virtual-economy litigation frequently combines:

legal experts + financial experts + blockchain specialists.

51. European Regulatory Environment

The European Union has increasingly moved toward specific regulation of crypto-assets.

The most important development is the Markets in Crypto-Assets (MiCA) framework.

MiCA addresses areas such as:

crypto-asset services;

issuers;

trading platforms;

custody;

market integrity;

stablecoins.

This regulatory structure can significantly affect future civil litigation because regulatory obligations may provide evidence concerning:

standard of care;

disclosure;

custody;

conflicts of interest;

market conduct.

52. Civil Liability Under Crypto Regulation

A breach of regulatory obligations does not automatically equal a private damages claim.

The court must still determine:

whether a private right of action exists;

whether the claimant suffered compensable loss;

whether the breach caused the loss;

whether national civil law supplies a remedy.

Therefore:

Regulatory breach and civil liability remain conceptually distinct.

53. Commercial Contracts in the Virtual Economy

Common agreements include:

exchange-user agreements;

NFT marketplace terms;

token purchase agreements;

smart-contract protocols;

custody agreements;

blockchain development agreements;

cloud-service contracts;

metaverse licensing agreements.

Each can generate ordinary contract disputes.

54. Limitation of Liability

Digital platforms frequently include clauses such as:

“The platform shall not be liable for any loss arising from cryptocurrency price fluctuations.”

Such clauses must be analyzed under applicable national law.

Courts may scrutinize:

exclusion of liability;

gross negligence;

fraud;

consumer protection;

unfair terms;

statutory rights.

55. Force Majeure

Virtual businesses may claim force majeure following:

blockchain outages;

cyberattacks;

exchange failures;

regulatory bans;

network congestion.

Whether such events qualify depends on the contract and governing law.

A general statement that:

“Blockchain technology is unpredictable”

does not necessarily establish force majeure.

56. Cybersecurity Liability

A virtual-economy platform may be liable where it fails to maintain reasonable cybersecurity.

Potential failures include:

inadequate authentication;

poor key management;

inadequate monitoring;

failure to patch vulnerabilities;

inadequate fraud detection.

The legal standard depends on:

contract;

tort;

regulatory obligations;

professional standards.

57. Comparative Legal Analysis

58. Six Core Cases for Examination

If an academic paper requires at least six cases, the following are particularly useful:

1. AA v Persons Unknown [2019] EWHC 3556 (Comm)

Cryptocurrency as property.

2. Tulip Trading Ltd v Bitcoin Association for BSV & Others

Potential duties of blockchain developers.

3. Ion Science Ltd v Persons Unknown

Crypto fraud, tracing and proprietary remedies.

4. D'Aloia v Persons Unknown [2022] EWHC 1723 (Ch)

Tracing and service through digital means/NFT.

5. Skatteverket v Hedqvist, C-264/14

EU recognition of Bitcoin's economic/payment function.

6. ByBit Fintech Ltd v Persons Unknown

Cryptocurrency fraud and proprietary remedies.

Additional authorities:

Google Spain, C-131/12;

Digital Rights Ireland, C-293/12;

Schrems II, C-311/18;

B2C2 v Quoine as a comparative smart-contract authority.

59. Key Legal Principles Derived from the Case Law

Principle 1 — Digital assets can receive proprietary protection

AA v Persons Unknown demonstrates the willingness of courts to treat cryptocurrency as property for appropriate legal purposes.

Principle 2 — Anonymity does not eliminate civil liability

Ion Science and D'Aloia demonstrate the use of proceedings against persons unknown.

Principle 3 — Blockchain developers may potentially owe legal duties

Tulip Trading demonstrates the possibility of applying traditional legal duties to decentralized systems.

Principle 4 — Cryptocurrency has recognized economic functions

Hedqvist demonstrates that EU law can recognize Bitcoin as a form of payment for VAT purposes.

Principle 5 — Digital commerce remains subject to fundamental rights

Google Spain, Digital Rights Ireland and Schrems II demonstrate that virtual commerce operates within European data-protection and fundamental-rights principles.

60. Practical Hypothetical

Suppose a French company purchases €5 million worth of cryptocurrency through a European exchange.

The exchange:

holds the assets in a custodial wallet;

suffers a cyberattack;

loses €2 million;

refuses to reimburse customers;

becomes insolvent.

The company may ask:

Question 1

Did the company own the cryptocurrency?

Question 2

Was the exchange merely a custodian?

Question 3

Was the exchange negligent?

Question 4

Were customer assets segregated?

Question 5

Can the company trace its assets?

Question 6

Can it obtain a proprietary injunction?

Question 7

Which jurisdiction applies?

Question 8

Does the exchange's contractual limitation clause apply?

Question 9

Does insolvency transform the claim into an unsecured debt?

This illustrates why virtual-economy litigation frequently involves several areas of civil law simultaneously.

61. Remedies

Possible remedies include:

Damages

Compensation for economic loss.

Restitution

Return of cryptocurrency or money.

Proprietary injunction

Preventing disposal of specific digital assets.

Freezing injunction

Preventing defendants from dissipating assets.

Tracing

Following assets through multiple wallets.

Disclosure order

Requiring exchanges or intermediaries to identify account holders.

Specific performance

Requiring contractual performance.

Rescission

Setting aside a transaction induced by fraud or other recognized grounds.

62. Major Challenges for European Courts

The most difficult questions are likely to concern:

Who owns a digital asset?

Who controls a blockchain protocol?

Who is liable for smart-contract errors?

How should cryptocurrency be valued?

Which country's law applies?

Where did the damage occur?

How should anonymous defendants be served?

Can digital assets be seized or traced?

How should virtual property be treated in insolvency?

When does platform responsibility arise?

63. Conclusion

Virtual economy commercial litigation in Europe represents the application of traditional civil-law concepts to technologically novel forms of economic activity.

The essential legal transformation is not that Europe has abandoned traditional civil law. Rather, courts are adapting familiar concepts—property, contract, tort, restitution, unjust enrichment, fiduciary duty, damages, tracing and injunctions—to assets and transactions that exist in digital environments.

The most important developments can be summarized as follows:

Cryptocurrency can potentially constitute property.

Digital assets can be traced and protected by proprietary remedies.

Anonymous blockchain users can potentially be sued as persons unknown.

Courts can adapt service procedures to blockchain technology.

Smart contracts do not necessarily escape ordinary contractual principles.

Blockchain developers may potentially owe legal duties in appropriate circumstances.

EU law recognizes cryptocurrency's economic functions, while subjecting virtual businesses to wider regulatory and fundamental-rights requirements.

The most important authorities for a European civil-law study are AA v Persons Unknown, Tulip Trading, Ion Science, D'Aloia, ByBit Fintech and Hedqvist (C-264/14). Together they provide a strong foundation for analyzing digital-property rights, cryptocurrency theft, tracing, anonymous defendants, blockchain developer liability, digital contracts and the EU's treatment of virtual assets.