Cutting-Edge Strategies in Crypto Fraud Cases | UK

The English courts have so far demonstrated a willingness to assist victims of crypto fraud and apply old law flexibly to novel ideas and technology. For example, the courts have accepted that crypto-assets can constitute property and have also applied English Law to crypto fraud cases. In terms of tools for crypto-asset recovery, in certain crypto-asset fraud cases the English courts have embraced worldwide freezing injunctions and proprietary injunctions, as well as disclosure orders.

A couple of very creative crypto-asset recovery solutions have been explored in the English courts. One such case involves Tulip Trading, which sought an order for core developers of various Bitcoin networks to effect amendments to the software allowing it to recover access and control to its Bitcoin wallet following a hack.  Tulip Trading argues that the developers of the Bitcoin networks owe fiduciary duties to implement changes on the network.

Due to the decentralised nature of crypto-assets, recovery cases involving such assets present unique challenges when it comes to establishing jurisdiction and applying any particular governing law to a dispute. Case law in this area is far from settled. Going back to the Tulip Trading case, the very notion of the English courts requiring the modification of a decentralised ledger potentially threatens key principles underlying blockchain.