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I am sure there is a word that describes this concept, but I do not know it so I shall have to describe it. Suppose Alice has a mobile phone, Broke Bob steals it, sells it to Charlie's Mobile Phone Shop for £100, loses the £100, then admits to the crime. In this case, Alice retains ownership of the phone, Charlie must return it and is out of pocket. Alternatively, if Alice has £100, Broke Bob steals it, takes it to Charlie's Mobile Phone Shop and buys a phone, loses the phone, then admits to the crime. In this case, Charlie retains ownership of the £100, and Alice is out of pocket.

Which is cryptocurrency more like? The situation I am concerned with is if one buys cryptocurrency that later turns out to have been involved in some form of crime, could you lose ownership of the currency in a way that you could not with actual money, but could with other goods?

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  • UK - "Proceeds of crime is the term given to money or assets gained by criminals during the course of their criminal activity. The authorities, including the CPS, have powers to seek to confiscate these assets so that crime doesn't pay." I'm not sure if this would extend to items bought with those proceeds. It would most likely depend on the value and if it was considered worth trying to trace someone and seize the asset. In this case cryptocurrency.
    – William Isted
    Commented May 10, 2022 at 11:25
  • @WilliamIsted The case I am imagining is when someone buys bitcoin from coinbase and stores it in a wallet accociated with their real identity. Someone later identifies those bitcoin as ones that were stolen from them, perhaps years ago, could they claim them back from the current holder?
    – User65535
    Commented May 10, 2022 at 11:48
  • I don’t believe there would be any mechanism for the original owner of the bitcoin to legally acquire the identity and address of the new holder (in the UK) so wouldn’t be able to make a civil claim. They could try to get a court to have the bitcoin wallet frozen by the company holding it (if applicable) and have that company notify the holder of legal action. But that’s theoretical. I’m not sure what the power of civil law would be with cryptocurrency if any.
    – William Isted
    Commented May 10, 2022 at 14:20
  • Many people/organisations make their wallet address public, so as to accept payments.
    – User65535
    Commented May 10, 2022 at 14:24

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Cryptocurrency is like the phone

Money is a negotiable instrument which means that an owner in good faith has a better claim than the true owner. No jurisdiction has given this status to crypto.

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