An English high court made history by becoming the first court in the UK to classify a cryptocurrency as a property at full trial.
Crypto’s status as a property has been confirmed in a recent ruling in the English High Court. On Thursday, the presiding judge, Richard Farnhill, ruled that Tether’s stablecoin USDT could be classified as a property in a fraud case.
Judge Farnhill stated that USDT attracted property rights under English law because it possesses certain property characteristics, which include traceability and usage as a trust property. It is worth noting that this was the first-ever ruling in the United Kingdom in which cryptocurrencies were classified as property at full trial.
Notably, the usage of cryptocurrencies has gone broader over time. A court in the United Arab Emirates categorized cryptocurrencies as a means of salary payment in August. There was also an earlier report where a Texas financial organization offered employee payment in Bitcoin.
Case Etymology
The Thursday case was a lawsuit filed by plaintiff Fabrizio D’Aloia. The claimant stated that an unidentified defendant scammed him and made off with his cryptocurrencies. According to the filing, the funds were denominated in USDT and Circle’s USDC and worth £2.5 million ($3.3 million).
D’Aloia filed the lawsuit against seven defendants, which included two unknown persons, Binance, Gate Technology Corp., Polo Digital Assets, AUX Cayes, and Bitkub. An earlier court sitting had nullified charges against the largest crypto exchange, Binance, with the September 12 hearing focused on Thai-based trading platform Bitkub.
According to the lawsuit, D’Aloia stated that the unidentified defendant moved his stolen funds through several networks and crypto-mixing platforms before another defendant withdrew the money through Gate.io and Bitkub. D’Aloia further claimed that 46,291 USDT from the 400,000 USDT Bitkub received in February 2022 was a part of his stolen crypto.
However, Farnhill stated that although USDT could be traced, D’Aloia doesn’t have sufficient evidence to prove that his USDT was part of the funds Bitkub received at its address on the said date. He ruled that the plaintiff couldn’t seek a refund from the Thai-based exchange as it didn’t enrich itself from his funds.
UK Introduces Crypto Property Bill
The ruling came a day after the UK Labour government introduced a bill to the Parliament to classify digital assets as property. The law would require the judicial system to treat digital assets as property during cases of ownership disputes or fraud.
According to the filing, certain cryptocurrencies, non-fungible tokens (NFTs), and real-world assets (RWA) would be seen as “things.” Minister of Justice Heidi Alexander noted that some digital assets may not fall into any category of things under the current law (“thing under possession” and “thing under action.”) However, the law would treat them with property rights.
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