Oct 21 2020 12 mins 2
This podcast explores the legal remedies that are available when Bitcoin are misappropriated, and some of the practical challenges of enforcement. For a more detailed analysis of the treatment of cryptoassets as property, see the Legal Statement on cryptoassets and smart contracts, November 2019, published by the LawTech Delivery Panel UK Jurisdiction Taskforce (downloadable here).
The legal basis for recovery of fraudulently misappropriated Bitcoin and factors that are engaged on an interim application are addressed in AA v Persons Unkown, Re Bitcoin [2019] EWHC 3556 (Comm).
In relation to crypto-assets as property in other common law jurisdictions, see:
- Ruscoe v Cryptopia Ltd (In Liquidation) [2020] NZHC 728 (New Zealand).
- B2C2 Ltd v Quoine Pte Lrd [2019] SGHC(I) 03 (Singapore).
For a detailed explanation as to the technical workings of Bitcoin, see Bitcoin: A Peer-to-Peer Electronic Cash System, Nakomoto, 2008 (available here).
Note: in an earlier version of this podcast, the exchange was unable to transfer Alice's bitcoin back to her because it did not have access to the fraudster's private keys. In practice, however, the majority of mainstream exchanges do control account holders' private keys (allowing them to treat "deposited" bitcoin as fungible). Therefore we have altered the scenario to reflect the more common case (albeit at the expense of illustrating a conundrum we think rather interesting!).
