In the past, collecting on a judgment usually meant finding bank accounts, wages, or physical property. But today, things have changed. More people are holding their wealth in cryptocurrencies like Bitcoin or Ethereum—or even in digital assets like NFTs (non-fungible tokens). For creditors trying to collect on a legal judgment, this shift makes things more complicated.
Let’s break down what it means to collect a judgment against someone who owns crypto, and what strategies can help you do it successfully.
Why Crypto Makes Collection Harder
Unlike cash in a bank account, cryptocurrencies are stored in digital wallets. These wallets can be held on a phone, computer, or even on paper in the form of a “private key.” If the debtor doesn’t tell you where the crypto is, it’s not easy to find. On top of that, crypto isn’t always held in the debtor’s name—it’s stored under a string of numbers and letters called a wallet address.
Also, many cryptocurrencies are decentralized. That means there’s no bank or central company that controls the money. This makes it harder to freeze or seize the assets through a typical court order.
Step 1: Identify the Crypto Assets
The first step in collecting against crypto is figuring out if the debtor even owns any. Sometimes, the person may mention their crypto holdings on social media or in emails. Other times, their bank records may show transfers to known cryptocurrency exchanges like Coinbase or Binance.
Once you suspect the person has crypto, your attorney can ask for this information during the legal process known as “post-judgment discovery.” This includes written questions, document requests, and even depositions. If the debtor lies or refuses to answer, they can face serious legal trouble, including being held in contempt of court.
Step 2: Use Subpoenas to Exchanges
If you know the debtor uses a certain exchange—like Coinbase, Kraken, or Gemini—you can issue a subpoena to that company. Many of these platforms are based in the U.S. and will respond to legal requests. They may provide account statements, wallet addresses, and even help freeze funds once a court order is in place.
Keep in mind, though, that offshore exchanges or decentralized finance (DeFi) platforms are harder to reach. They may not follow U.S. laws or cooperate with judgment enforcement.
Step 3: Go After NFTs and Other Digital Assets
In addition to cryptocurrency, people may hold value in NFTs—digital art, music, or collectibles stored on the blockchain. These assets can also be traced and seized in some cases, especially if they’re listed on a public marketplace like OpenSea.
NFTs may not be worth as much as traditional crypto coins, but they can still have real monetary value. With the right court orders and digital tracking, these assets can be identified and included in the collection process.
Step 4: Enforce Through the Courts
Once you’ve located crypto or NFTs, your lawyer can go to court to get an order allowing the seizure or transfer of those assets. If the debtor refuses to cooperate, a judge can hold them in contempt, impose fines, or even jail time in extreme cases.
Because this area is still new and rapidly changing, having an experienced Judgement Collection Attorney is essential. They’ll know how to navigate the technical and legal challenges involved in dealing with digital assets.
Extra Tools and Tactics
Other tools that help with crypto collection include:
- Forensic Blockchain Analysis: Specialized software can trace wallet activity, link addresses, and reveal connections to known exchanges.
- Turnover Orders: These are court orders that demand the debtor hand over control of a crypto wallet or private key.
- Receiverships: In complex cases, the court can appoint a neutral third party to take control of the debtor’s assets and manage the recovery process.
Final Thoughts
Crypto and digital assets aren’t just a tech trend—they’re a growing part of many people’s financial lives. If someone owes you money and is trying to hide behind the blockchain, it’s important not to give up. With the right legal tools, you can collect what you’re owed—even if it’s stored in a digital wallet.
At Warner & Scheuerman, we help clients tackle difficult collections, including judgments involving cryptocurrency and NFTs. Don’t let digital assets stand in your way—get experienced legal help to secure your rightful recovery.