UK Law and Practice Contributed by: Simon Bushell and Gareth Keillor, Seladore Legal
Property (Digital Assets, etc) Bill, which aims to clarify the position further. Last year, for the first time at a full trial (as far as we are aware), the English courts decided that “USDT” (a “stablecoin” , or cryptocurrency pegged to the US dollar) is property. The courts’ approach follows the Law Commission’s 2023 report into the legal status of digital assets, in which the Commission concluded that some crypto-assets are capable of being treated as personal property under English law. The courts’ ruling also follows a strong line of preliminary findings that there is a realistically arguable claim that the cryptocurrency assets in question are a form of property for the purposes of English law. The recent full trial finding, as well as the introduction of the new bill, solidify the position that cryptocurrency can be treated as property under English law. The law on the location of a crypto-asset (rel - evant for determining whether a court has juris - diction over the dispute) is in its infancy; how - ever, early case law suggests that the relevant location is the place where the person or com - pany that owns the coin or token is domiciled.
The English courts have also demonstrated willingness to be responsive in cases of cryp - to-asset fraud, which are steadily on the rise (albeit not in line with the massive increase in crypto-asset usage), recognising that “time is of the essence” when facing potentially rapid dis - sipation of the proceeds of fraud. The particu - lar issue in cases of crypto-asset fraud is that it is difficult to establish the identity and location of the wrongdoers. In such cases, the English courts are able to grant: • a Bankers Trust order against a cryptocurren - cy exchange (including one located outside England and Wales) to obtain information about the relevant transactions with a view to identifying the hackers (see 2.3 Obtain- ing Disclosure of Documents and Evidence From Third Parties ); or • a proprietary injunction against “persons unknown” , provided the relief was limited to assets which the individuals knew or ought reasonably to have known did not belong to them (see 2.8 Claims Against “Unknown” Fraudsters ). If the individuals can be identified, it is also pos - sible to obtain freezing relief as against those individuals’ dealings with the proceeds (see 1.7 Prevention of Defendants Dissipating or Secreting Assets ).
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