October 19, 2020

Volume X, Number 293

October 19, 2020

Subscribe to Latest Legal News and Analysis

English Court confirms that cryptoassets are property

The English Court has now made a clear ruling; “I consider that cryptoassets such as Bitcoin are property“, Bryan J concludes in his judgment in AA v Persons Unknown.

The Court has granted another interim injunction over Bitcoin, this time held in an account of a cryptocurrency exchange after it had been transferred to the exchange as part of a cyber-attack on a Canadian insurance company.

Unlike the previous cases, which only act as persuasive authority on the matter (such as the one in our previous blog post), the Court here fully considered the issue of whether cryptocurrency is property and made a direct ruling on it. The judgement ratifies in English law the UK Jurisdictional Taskforce’s (“UKJT”) statement on the subject (published in November 2019), which otherwise has no formal status as a legal precedent on its own.

Background

The primary relief sought was an injunction to prevent the dissipation of Bitcoin as well as disclosure orders to allow the Applicant to identify the wrongdoers. In order to obtain proprietary injunction, it was necessary for the Judge to be satisfied that the Bitcoin were property.

Bitcoin as Property

The law traditionally recognises two types of personal property; items which could be possessed or those which give rise to a right that can be enforced through the Courts. Cryptocurrencies do not fit neatly into either category as they are intangible and do not themselves give rise to a right of action in the way that a contractual right or a debt would do.

Crucially, in this case, Bryan J was compelled by the UKJT’s analysis that cryptoassets meet the four criteria set out in Lord Wilberforce’s classic definition of property in National Provincial Bank v Ainsworth [1965] 1 AC 1175 as being definable, identifiable by third parties, capable in their nature of assumption by third parties, and having some degree of permanence.

Comment

The finding that cryptocurrencies are property under English law will have significant consequences for the application of a number of English legal rules, including those relating to succession on death, the vesting of property in personal bankruptcy, and the rights of liquidators in corporate insolvency, as well as in cases of fraud, theft or breach of trust.

© Copyright 2020 Squire Patton Boggs (US) LLPNational Law Review, Volume X, Number 35

TRENDING LEGAL ANALYSIS


About this Author

Garon Anthony Litigation Attorney Squire Patton Boggs Birmingham, UK
Partner

Garon is a partner in the Litigation Practice Group. He advises clients across the full range of commercial dispute issues, including cyber liability/data breach, professional negligence, banking, pensions and insurance.

Garon regularly acts for clients who are subject to investigations or disciplinary proceedings by national and international regulators, including most recently the Financial Conduct Authority, the Financial Reporting Council and the Dubai Financial Services Authority.

Related Services

  • Litigation
  • Data Privacy & Cybersecurity
  • ...
44 121 222 3507
Rose Chaudry, Squire Patton, Commercial Litigation Lawyer, Tortious Contracts Attorney
Associate

Rose Chaudry is an associate in the Litigation team with expertise in general commercial litigation. Rose qualified in September 2015 after completing her training contract with the firm.

Rose regularly acts for a diverse client base, including individuals and companies, from SMEs to PLCs. Rose has experience advising on a wide-range of matters of both a contractual and tortious nature, including breach of contract, breach of warranty, debt recovery, professional negligence and insurance.

44 121 222 3146