Vallen cryptovaluta’s buiten het bereik van het gewone recht? De afdeling Strafrecht buigt zich over een intrigerende zaak die de rechters voor een dilemma stelde toen deze voor het Hooggerechtshof kwam.
On March 25 2022 the High Court passed a judgment which deliberated upon significant questions in relation to jurisdiction and cryptocurrency in the case of Tulip Trading Ltd (TTL) v Bitcoin Association for BSV, the original Bitcoin.
Eiser TTL is een holdingmaatschappij van dr. Craig Wright, opgericht op de Seychellen. TTL stelde dat zij de toegang tot hun Bitcoin-rekening was ontzegd na een hack op de computer van dr. Wright, waarbij Bitcoin ter waarde van 1,1 miljoen pond, eigendom van TTL, het slachtoffer werd van deze hack.
Additionally, the private keys needed to access the account had been stolen and deleted from Dr Wright’s computer. Therefore TTL was unable to access or control the Bitcoin.
Unlike other cryptocurrency hacks we have seen recently, the Bitcoin in question had not actually been taken from its original locatie or transferred elsewhere. However, without the private keys TTL was unable to access it.
In light of this, TTL did not seek remedies against the alleged perpetrators of the hack. Instead, they issued proceedings against the 16 core developers (the defendants) who controlled the software in respect of ‘the Networks’ on which the Bitcoin was stored.
TTL claimed that the defendants owed a fiduciary or tortious duty to assist TTL in regaining control and use of the Bitcoin. If that was not possible, TTL sought equitable compensation or damages if the former remedy was not successful.
A key defining issue in this case, was the fact that none of the defendants were based in the jurisdiction of England and Wales. Therefore, as opposed to a full trial, the judgement was in fact an interim application specifically related to a number of defendants’ challenge to the court’s jurisdiction and ability to permit service outside of England and Wales.
In order for the defendants to succeed with their jurisdictional application, the following requirements had to be satisfied:
Of er een ernstige kwestie was die voor de rechter moest komen
of er een sterke argumentatie was dat de zaak onder een of meer van de in CPR PD 6B, paragraaf 3.1, genoemde bevoegdheidscriteria viel; en
Of in alle omstandigheden:
1. Engeland is duidelijk of onmiskenbaar de aangewezen plaats voor de behandeling van het geschil; en
2. De rechtbank dient haar discretionaire bevoegdheid uit te oefenen om betekening van de stukken buiten het rechtsgebied toe te staan.
Considering this, the court found that TTL had not established a serious issue to be tried on the merits of its claim. Additionally, it held that developers did not owe TTL any fiduciary duties for the following reasons:
Bitcoin owners could not realistically be described as having entrusted their eigendom to a fluctuating, unidentified body of software developers
The distinctive characteristic of a fiduciary relationship is the obligation of ‘undivided loyalty’. However, the steps that TTL required the defendants to take – such as writing and implementing a software ‘patch’ which would enable TTL to recover the Bitcoin, would only benefit TTL – rather than the other users of the network. In fact, the court argued that the changes sought by TTL could even be disadvantageous to other users of the network; and
De eisen van TTL hadden de gedaagden aan risico’s kunnen blootstellen; als de ontwikkelaars bijvoorbeeld de softwarepatch voor TTL hadden gemaakt, zou de kans bestaan dat potentiële concurrerende eisers met betrekking tot de Bitcoin een legitieme vordering tegen de gedaagden zouden kunnen instellen
It can be deduced from this outcome that although this case has left open a narrow potential route to liability and remedy, the judgment could be seen as highlighting the key concerns that tort and common law may be proving themselves incapable of adapting to new technologies and characteristically international/cross-border business en commercieel structures.
Furthermore, while legislation and regulation are the only viable route – any such legislation and regulation must reflect international cooperation. Unless that cooperation is global, it has limited chance of being effective.
Dit roept de vraag op: betekent dit dat Bitcoin en andere cryptovaluta buiten het bereik van de conventionele wetgeving vallen?
The answer is currently being unravelled and it zal be interesting to see how legal developments in this space will progress in the coming years, particularly considering the recent volatility of Bitcoin and other cryptocurrencies, which may well leave many investors holding a loss.
For further information contact Piers Desser on 020 7613 1402 of e-mail
