The Legal Nature of Crypto-Related Disputes
Disputes connected with crypto assets are often difficult because the transferred property moves in the digital space while the legal dispute is examined in the ordinary order. The Civil Code of Georgia answers these disputes in three directions: by the claim against the pretend creditor, by the rules on unjust enrichment, and by the tortious route of compensation of damage. Where a person transferred a crypto asset for the performance of an obligation that in reality does not exist, or where the recipient was unjustly enriched at another's expense, the law gives the instrument of a claim for return. A purposefully chosen cause of action and a properly assembled body of evidence determine the fate of the decision in these disputes. The three directions are interconnected: on the same factual circumstances different possible grounds may be assessed, and the court chooses the norm that precisely reflects the substance of the dispute. Therefore, when preparing a claim, it is important to restore the chronology of the facts, to determine the character of the parties' relationship and to classify each transfer.
Grounds for the Claim Against the Pretend Creditor
Under the Civil Code, a person who transferred something to another for the performance of an obligation may demand from the pretend creditor — the recipient — its return, where the obligation does not exist due to the voidness of the transaction or another ground, does not arise, or has subsequently terminated, or where such a claim was presented against the obligation that for a long period the presentation of a claim is excluded. In the crypto world this scheme often fits disputes born of fraudulent transactions: the deceived party discovers that the obligation for which the asset was transferred never existed. At the same time, the return claim is excluded where the performance corresponds to moral duties, the limitation period has passed, the recipient could assume that the performer wished the transfer regardless, or the claim contradicts the protective function of the norms on voidness in connection with the performance of a void debt agreement.
Unjust Enrichment and Its Consequences
Where the dispute does not fit the pretend-creditor construction, the party uses the general rule of unjust enrichment: a person who has been unjustly enriched at the expense of another person by other means is obliged to return what was received. This norm is a framework of broad protection: it covers the situation where the asset ended up with the recipient without a legal ground of transfer — including through a technical error or circumstances that are difficult to establish. In such a dispute the party must prove the fact of enrichment, its groundlessness and its occurrence at the expense of the other person, after which the obligation of return arises. The technical details of crypto transfers — wallet addresses, transaction data, records of exchange operations — form the basis of this evidence. Because blockchain records are technically publicly accessible, their proper fixation and presentation in a form in which the court assesses them is of particular importance, and the possibility of obtaining a specialist's conclusion may also be considered where it follows from the substance of the dispute.
The Tortious Ground of Compensation of Damage
Where the object of the dispute is not return but damage caused — for example, the value of lost funds or diminished assets — the dispute is examined under the tortious rule: a person who causes damage to another person by an unlawful, deliberate or careless action is obliged to compensate that damage. Applying this rule in crypto disputes requires establishing the unlawfulness of the action, fault and the measure of damage. Where actions were committed with the participation of international exchange platforms, questions of jurisdiction and applicable rules are reflected additionally, although Georgian law provides the general ground for compensation of damage.
Frequently Asked Questions
Can the return of a crypto asset be demanded?
Yes. Where the asset was transferred for the performance of a non-existent obligation, the person may demand its return from the recipient on the ground of the claim against the pretend creditor, and in other cases under the rule on unjust enrichment.
When is the return claim excluded?
The claim is excluded where the performance corresponds to moral duties, the limitation period has passed, the recipient could assume the will to transfer, or the claim contradicts the protective function of the norms on voidness.
What must be proven for compensation of damage?
The unlawfulness of the action, fault — deliberate or careless conduct, the fact of damage and its measure, as well as causation between the action and the damage.
What evidence is used in such disputes?
Transaction data, information connected with wallet addresses, records of exchange operations and the correspondence of the parties. The court assesses the content of the case file on the basis of the evidence presented.
How We Help on Legal.ge
The team of Legal.ge will assist you in disputes connected with crypto assets: we assess the ground of the dispute, plan the collection of evidence, prepare a claim for return, for unjust enrichment or for compensation of damage, and represent your interests in court. Contact us — timely legal reaction increases the chance of recovering assets.