What happens to an NFT in case of the owner’s insolvency?

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  • Germany
  • Kenya
  • Brazil
  • Sweden
  • Nigeria
  • Poland


It becomes part of the insolvency estate and creditors are satisfied on a pro rata basis.
Can NFTS be subject to a foreclosure and if yes, how is it enforced/executed?
If one assumes a property right to NFTs, it becomes part of the bankruptcy estate and third
parties must transfer the NFT.
In turn, third parties who have a property right to the NFT can take it out of the insolvency

Johannes Arndt

Crypto: Private Law


There exists no legal precedent currently in Kenya regarding an insolvent NFT owner.

Norman Gabula

Commercial Law


In the case of insolvency, the owner loses the availability of his assets, which are
under the management of an administrator appointed by Courts in a judicial insolvency
process, pursuant to article 1.052 of the Civil Code. Regarding NFTs, since they can be seen as
assets, the owner should lose its property if the Courts could have access to his private wallet;
or, in the case the NFTs are registered on private/centralized blockchains, Courts could request
these protocols for the transfer of the NFTs so that they could be sold to pay the owner’s


It will be converted into (fiat) money, and the money will be distributed to the owner’s creditors.

Elvin Sababi

Regulatory and Compliance (including AML), NFT IP rights, Crypto taxation


There is no specific law currently dealing with this. However, since NFT can pass
as property rights, the NFT asset can be calculated when determining whether or
not an Owner is insolvent.

Ifeanyi E. Okonkwo

Intellectual Property & Commercial Law


If the NFT was acquired by a third party, the issuer's bankruptcy does not affect its ownership and possession. At the same time, if the functionalities of the NFT token are inextricably linked to the existence and continued operation of the issuer, they may not be enforceable. Possible claims of the NFT purchaser against the issuer will depend on the content of the contract between them.

Filip Szydłowski


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