Offshore Litigation Blog

The title of this article might accurately describe the alien encounter and possibly out-of-body experience that some have faced when trying to understand digital assets, particularly cryptocurrency, and whether they are considered property.

In a recent matter our firm obtained Norwich Pharmacal relief against a centralised digital asset exchange, marking an important first step in the effort to recover misappropriated digital assets. While the Grand Court did not issue a formal judgment, it made several noteworthy observations that may influence the future handling of similar cases.

In a helpful decision for creditors of distressed crypto-platforms, the Singapore Court has clarified in Aaron Loh Cheng Lee and another v Hodlnaut Pte Ltd …

In a recent decision, AQF v XIO, VQF and CGN (made ex parte), the BVI Commercial Court (BVI Court) not only imposed a freezing order against the unknown scammers, but also ordered a mandatory interim injunction against the issuers of the relevant cryptocurrency (Issuers) to assist a victim of an “address poisoning” scam. Significantly, the Court granted the Applicant’s application for an order for service out of the jurisdiction on the unknown scammer by way of non-fungible token (NFT) airdrop to their digital wallet addresses, a first in the BVI.

In a recent decision the English High Court discharged a proprietary injunction that enjoined Binance from dealing with the proceeds of a scam. In doing so, the court warned against assuming that cryptocurrency exchanges act as constructive trustees of misappropriated digital assets.

Since December 2022, there have been a number of reported cases of digital assets being mysteriously drained from users' wallets across different blockchains and affecting different platforms. One of the affected platforms, Metamask, has said that data shows 5,000 ETH (worth approximately US$10m) has already been stolen from various addresses across 11 blockchains. However, the root cause of the problem is unknown, with experts unable to identify a specific attack causing the losses.

The digital assets world has seen a number of collapses of some of the market’s key players. In this post, we examine the fallout of three household crypto names and the legal proceedings that have ensued. The domino effect of one collapse leading to another is no coincidence.

In its recent decision in LMN v Bitflyer Holdings Inc & Ors, the English High Court made third-party disclosure orders against six foreign cryptocurrency exchanges registered in various jurisdictions around the world. The order was made to enable the applicant access to information that could be used to identify hackers who had stolen millions of dollars worth of digital assets from the Claimant in 2020 and to trace the stolen cryptocurrency.

In the penultimate episode of Contentious Crypto, Christopher Pease and Megan Elms, along with Kalo guest speaker James Drury, discuss what steps can be taken when the identity of the wrongdoers is unknown, the challenges posed by pursuing persons unknown and how the courts are adapting.