Last updated on January 5th, 2023 at 12:09 pm
A taskforce of the Law Tech Delivery Panel ( UK Jurisdiction) on 22nd November 2019 published the first ever “Legal Statement on the Status of Cryptoassets and Smart Contracts” in which it analysed in-depth the proprietary status of cryptocurrencies, such as Bitcoin. It concluded, cryptocurrencies are property and therefore capable of being the subject of a proprietary injunction.
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On Friday Last Week, the UK High Court validated the Taskforce’s findings when it held that Bitcoins were property and granted an insurance company a proprietary injunction against Bitfinex Exchange – a Cryptocurrency Exchange and other two respondents.
The insurance company had paid a ransom in Bitcoin on behalf of a customer to secure the reinstatement of the Customer’s hacked and disabled software systems. The Bitcoin ransom transfer was tracked down and linked to the Bitfinex Exchange.
Although the insurance company’s application was based on restitution and constructive trust, the fundamental question the Court considered was whether or not the Bitcoins were property.
Upon a review of previous cases in which Bitcoin had been treated as property with however no consideration of its proprietary status and of the Legal Statement on the Status of Crypto Assets and Smart Contracts by the Taskforce of the Law Tech Delivery Panel, the Court ruled that Bitcoins were property and thus could be a subject of a proprietary injunction.
The Judgement is important because it demonstrates Judicial adaptability and flexibility in recognizing new forms of assets and effort toward enabling claims based on such new forms of assets.
Case Reference: AA V. Persons Unknown  EWHC 3556 (Comm)
Benjamin Ahikiiriza is a Legal Writer And Digital Communications & Marketing Specialist majoring in Lawyers, Law Firms And the larger Legal Sector.
Benjamin currently Works as the Director of Content and Business Development At LegalReports.