Digital assets: legal challenges and practical solutions

By Yasmine EDDAM6 April 2025

The rise of digital assets represents an economic and technological revolution that is transforming the way we manage our assets. For legal professionals and their clients alike, this new legal territory raises complex issues. The European MICA regulation and French law attempt to provide a framework for these assets, but many grey areas remain.

What are digital assets?

The MICA Regulation defines a crypto-asset as "a digital representation of a value or right that can be transferred and stored electronically, using distributed ledger or similar technology".

More broadly, according to the Unidroit Principles, a digital asset is an electronic record that can be "controlled" or "monitored".

Under French law, Article L. 54-10-1 of the Monetary and Financial Code includes two distinct types of asset in this category:

Negotiable tokens, defined as "any intangible asset representing, in digital form, one or more rights".
Crypto-currencies or virtual currencies, which are "digital representations of value" not issued by a central bank.

This deliberately broad definition encompasses different economic and technical realities.

The main categories of digital assets

Crypto-currencies

Crypto-currencies such as Bitcoin or Ether are the best-known form of digital assets. In its decision of 26 February 2020, the Nanterre Commercial Court described them as fungible and consumable assets.

Contrary to popular belief, these crypto-currencies are not currencies in the legal sense of the term. This distinction is crucial because it determines the nature and legal status of transactions such as loans, donations or guarantees.

However, there is an exception for electronic money tokens (e-MTs) recognised by the MICA regulation, which can be considered as genuine electronic money.

Utility tokens

Utility tokens confer a right or service on the issuer. They are often issued as part of an ICO (Initial Coin Offering), a form of public offering.

These tokens can represent different rights:

Exclusive rights to use a technology
Loyalty points
Financial or political rights

Non-fungible tokens (NFT)

NFTs represent a unique certificate linked to a physical or digital asset. Their non-fungible nature means that they are not interchangeable, unlike crypto-currencies.

The NFT is not, strictly speaking, the asset itself, but rather a new-generation instrument that establishes a link between a holder and an underlying asset. Its value derives from the scarcity it creates through its non-fungibility.

An NFT can represent :

A digital work of art
A plot of land in a metaverse
A certificate of authenticity for a luxury product

Major legal issues

The question of ownership and control

The notion of "mastery" or "control" is central to the legal understanding of digital assets. This notion, at the heart of the Unidroit Principles, corresponds to :

The ability to benefit from digital assets
The ability to prevent third parties from benefiting from it
The ability to transfer these prerogatives to a third party

Technically, this "control" involves holding the cryptographic keys (private and public keys) or access codes to the platforms that store these assets.

In practice, whoever holds the keys has de facto power over the digital asset, which raises important questions in matrimonial property law or in cases of joint ownership.

Digital assets and matrimonial property law

For a couple married under common law, the question of how to classify digital assets is crucial.

Crypto-currencies and other digital assets are generally considered to be non-monetary and impersonal property. As such, they enter the community unless proven otherwise.

In terms of real subrogation, their non-monetary nature normally leads to automatic subrogation. If an own asset is transferred against crypto-assets, the latter should retain the nature of an own asset.

A particular difficulty arises with forks that may occur during a marriage. For example, if own bitcoins give rise to bitcoin cash through forking, these new assets may be analysed as accessories to the original asset.

Transactions for consideration

Guarantees on digital assets

Digital assets can be the subject of effective guarantees provided that traditional mechanisms are adapted to their particular nature.

For security tokens classified as financial instruments, the pledge of financial securities regime applies. For other digital assets, the pledge with dispossession under article 2355 of the French Civil Code seems the most appropriate.

Dispossession can be achieved by :

Transferring assets to an address controlled by the creditor
The introduction of a multi-signature system requiring creditor approval for all transactions

To compensate for the volatility of certain assets, a watering clause may be included to adjust the guarantee base in the event of a fall in value. These adjustments are designed to protect the interests of the parties by preventing extreme fluctuations from compromising the integrity of the guarantees. In addition, in a broader context, depreciation of business assets plays a crucial role in managing the value of assets, enabling better financial planning and anticipation of potential losses. Such an approach promotes greater stability in the collateral valuation process over the long term. The impact of asset impairment can nevertheless have a significant impact on a company's financial statements, affecting its ability to attract investment. By taking a proactive view of asset management, companies can better navigate the challenges associated with this depreciation and optimise their profitability. It also provides the financial transparency that builds stakeholder confidence. By drawing on accounting depreciation principlesWith this approach, companies can establish a strategy for valuing assets that reflects their actual use over time. This not only helps to comply with regulatory requirements, but also demonstrates rigorous financial management to investors. Consequently, mastering these principles becomes essential to ensure accurate and consistent assessment of economic performance, even in the face of market fluctuations.

Transfers and contributions

The virtual currency used in a sales transaction legally transforms it into an exchange contract rather than a sale in the strict sense.

For the contribution of digital assets to a company, the classification depends on their nature:

For an electronic money token (e-MTs), this could be a cash contribution.
For other digital assets, this is a contribution in kind, which may require the involvement of a contribution auditor.

Transferring digital assets

Donations

The donation of digital assets presents specific challenges linked to their nature and volatility.

In practice, two technical aspects are essential:

The need to identify precisely the assets donated and their value
The effective transfer of de facto power over these assets

For an effective donation, the notary must ensure that the donee opens an account with a platform and that the transfer is carried out in real time, with a screenshot attached to the deed.

There are several options for limiting the risks associated with volatility:

A lump-sum reporting clause
A conversion or reinvestment obligation
A shared donation that definitively fixes the value of the assets donated

Legacies

For bequests of digital assets, the sealed or international will seems particularly suitable because of the confidentiality it offers.

These forms of will make it possible to secure sensitive information (access codes, keys) without exposing it in the will itself, while guaranteeing its transmission to the designated heirs.

Tax and compliance

Reporting obligations

Article 1649 bis C of the General Tax Code imposes an obligation to declare digital assets held with companies established abroad.

Article 150VH bis of the French General Tax Code stipulates that capital gains realised on the sale of digital assets for valuable consideration are subject to income tax.

Since 1 January 2023, the tax rate has been 12.8% (excluding social security contributions) for non-professional sellers, with the option of opting for the progressive scale.

Combating money laundering

Legal professionals need to be particularly vigilant about the risks of money laundering associated with digital assets.

The TRACFIN reflex is essential for any payment made using digital assets, an obligation that notaries in particular comply with.

The relative anonymity of certain transactions and the difficulty of tracing the origin of funds require increased vigilance as part of compliance obligations. It is essential to establish rigorous procedures for identify non-financial assets and ensure the origin of funds. In addition, ongoing training of teams in best compliance practices will help to strengthen the security of transactions. Regular monitoring of suspicious transactions will also help to anticipate and prevent any illegal activity.

The role of legal professionals

Given the complexity and constant evolution of this field, legal professionals have an essential role to play:

Advice on the risks and opportunities associated with digital assets
Legal security for operations
Checking applicable regulations
Adapting traditional procedures to these new assets

Notaries, in particular, have a digital ecosystem (electronic authentic instruments, dematerialised registers, electronic safe) that positions them as key players in this economy.

Mastery of the technical aspects is essential to guarantee the validity and effectiveness of legal acts relating to digital assets.

For personalised support with your plans to acquire, sell or transfer digital assets, our team is on hand to help you secure your transactions and optimise their legal and tax treatment.