Bitcoin has been deemed to be legal property by a British court as an asset preservation order (APO) was issued to protect bitcoins stolen from a cryptocurrency fund.
The landmark decision, obtained by Stewarts Law on behalf of Liam Robertson, chief executive of Alphabit Fund, will have far-reaching benefits for victims of fraud and wallet hacking to help secure the return of stolen cryptocurrency.
Robertson’s fund was the victim of a spear phishing attack where the fraudsters diverted 100 bitcoins then worth £1.2 million ($1.47 million), with 80 bitcoins going to a wallet held at Coinbase and the other 20 to other local exchanges.
But tracking the destination is not enough. Because of the decentralized nature of bitcoin transactions and the immutable security protocols, exchanges cannot reveal the identity of wallet owners unless presented with a bankers trust order and an asset protection order.
Is Bitcoin Property?
Mrs Justice Moulder, a judge in the Business and Property Court, accepted that the proprietary claim was a serious issue and made the bankers trust and the APO, enabling the required information to be disclosed by Coinbase.
The decision was believed to be the first time an English court has considered in detail whether cryptocurrencies are property and susceptible to proprietary claims. Marc Jones, a partner in Stewarts’ cybersecurity team, commented:
Hopefully, Robertson v Person Unknown marks the start of the English courts grappling with and bringing English law up to date with a new asset class that is not going away.