German customs is expected to gain the authority to seize illegally sourced Bitcoin starting in 2027.

German customs may soon gain a new authority: even without initiating criminal proceedings, it can seize cryptocurrencies if there is sufficient reason to suspect their illegal origin. The German Bundestag passed the relevant reform bill on November 12, targeting large-value assets, especially those worth more than 100,000 euros. The bill is set to take effect on January 1, 2027, but still requires approval from the Bundesrat and formal promulgation. Aimed at strengthening customs' law enforcement powers and its ability to combat financial crime, the bill establishes an administrative procedure allowing law enforcement to freeze assets based on concrete evidence of suspected illegal origin. Therefore, merely holding large amounts of Bitcoin is not sufficient grounds for asset seizure. The German government has explicitly stated that crypto assets fall within the bill's scope. The government believes this mechanism will help address the challenge law enforcement faces in tracing the origin of certain assets, as asset holders possess information that can explain the source of funds. However, a distinction must be made between temporary seizure and final confiscation; the latter still requires a ruling by the finance court.