The UK has been long struggling to bring crypto under a legal framework. In its pursuit of bringing crypto under legal cover, English Law is considering the possibility of treating crypto as “property”.
The reason why crypto should be considered as “property” is that the number of crypto fraud victims is increasing rampantly. However, since crypto transactions are not covered by any legal structure, therefore, crypto fraud victims are left with no adequate remedy.
Finally, the English Courts got the opportunity of considering crypto as property when Ion Science Limited (IOS) brought a case before it.
The sole director of IOS filed the case namely Duncan Johns against another business entity called Persons Unknown. While there were other defendants/respondents, yet the main defendant/respondent was Persons Unknown. It was alleged in the court filing by Johns that the defendant in a crypto fraud scheme victimized him. He claimed that M/s. Black and M/s. Neo Capital offered him to invest in the initial coin-offering scheme, which was initiated. Both of these companies have been alleged to be associated with and business arms of the main defendant.
It was alleged by Johns that he had invested in the offering for the purchase of Bitcoins. However, his funds were misappropriated and stolen from his personal computer by M/s. Black. However, it was later revealed upon Johns as well as upon other complainants that Neo Capital did not exist at all. However, the Court found difficulty in understanding the case before it and ordered to seek an opinion from a crypto expert.
The expert opined that Johns’s funds were landed in one of the accounts of Binance, a leading crypto exchange of the world. It was further pointed out that some portion of other complainants’ funds were transferred to another crypto exchange’s accounts namely Kraken. Both the companies were registered and headquartered in the US, which was beyond UK Court’s jurisdiction. This created more difficulty for the Court in deciding the case justly and on merits.
However, the Court has finally decided the fate of this landmark case. The Court concluded that the cryptocurrency Bitcoin is in fact a “property” as defined under the common law practice.
It was prayed in the court filing that an omnibus freezing order should be passed against the accused under a proprietary injunction. They urged the Court that the Court should pass such an order, which should be implementable throughout the world. The UK High Court was of the considered view that it enjoys exclusive jurisdiction in the matter. It said that the damage caused to the victims in the UK and therefore claims can be lodged before the English Courts.
In the end, the Court granted interim relief freezing the accounts of the accused universally.