FinTech & Banking & financial disputes & Financial regulatory & Financial services

Court confirms status of cryptoassets as ‘property’

In the case of AA v Persons Unknown [2019] EWHC 3556 (Comm), the High Court has considered the status of cryptocurrencies for the first time since the publication in November 2019 of the UK Jurisdiction Task Force Legal Statement on Cryptoassets and Smart Contracts (“the Legal Statement”).



The claim followed an instance of blackmail using malware by the first defendant (persons unknown) against the claimant (a Canadian insurance company). The first defendant demanded a ransom of Bitcoin and the Applicant (the Claimant’s UK insurance provider) paid the requested Bitcoin to obtain the code to restore the Claimant’s encrypted files. The second defendant was persons unknown who held/controlled 96 Bitcoin held in a Bitfinex bitcoin address, the third defendant was IFINEX Inc trading as Bitfinex and the fourth defendant was BFXWW INC trading as Bitfinex.

The application was for a Bankers Trust Order and/or a Norwich Pharmacal Order requiring the third and fourth defendants to provide specified information in relation to a cryptocurrency account owned or controlled by the second defendant. They also asked the Court for a proprietary injunction in respect of the Bitcoin held at the account of the fourth defendant and/or a freezing injunction in respect of Bitcoin held at the specified account of the third or fourth defendant.

The application was narrowed during the course of the hearing to include only the proprietary injunction, with all other parts adjourned, owing to issues with jurisdiction (which are discussed below).

The hearing was allowed to be held in private to prevent revenge attacks on the claimant and the applicant, copycat attacks, the purpose of the application being frustrated i.e. the monies being moved and to protect information about the Claimant’s systems and the identity of the third and fourth defendants who had not yet addressed the Court. Notice was also not required. This shows the Court’s appreciation of sophisticated and fast-moving nature of these attacks.

Mr Justice Bryan granted the Order for a proprietary injunction in respect of the Bitcoin held at the account of the fourth defendant and an injunction for the third and fourth defendants to provide information about the first and second defendants and for the first and second defendants to identify themselves. The Order was allowed to be served out of the jurisdiction and by alternative means. The Court appreciated the need for quick action in regards cryptocurrency, the nature of which allows it to be moved easily and immediately.

Cryptoassets as property

With regard to the proprietary injunction sought, the key issue considered by the Court was whether the Bitcoin was property at all.

Mr Justice Bryan referred to paragraph 39 of the Legal Statement. He noted that the Legal Statement was not a statement of law. Nonetheless, he accepted the reasoning and conclusion of the Legal Statement that cryptoassets are property.

The Court adopted this conclusion on the basis that cryptoassets are definable, identifiable by third parties, capable in their nature of assumption by third parties and having some degree of permanence (National Provincal Bank v Ainsworth [1965]). This echoes the conclusion of the recent decision in the Singaporean Court in B2C2 Limited v Quoine PTC Limited [2019].

The Judge accepted that there was a further potential obstacle in treating Bitcoin and cryptocurrency as a form of property as they are neither physical things (choses in possession) as they are virtual, not tangible and cannot be possessed, nor are they legal rights (choses in action) as they are not a right capable of being enforced.  Traditionally, the existing authorities require property to be either a chose in possession or a chose in action. Using this definition, cryptoassets would not be classified as a form of property and this would prevent them from being the subject of proprietary injunctions or freezing injunctions.  However, the judgment agreed with the reasoning in the Legal Statement (paragraphs 71 – 88) that more modern legal authorities have accepted that the law may recognise forms of property other than choses in action and choses in possession.


One of the key issues with cryptoassets that the Court has yet to conclusively address is that of jurisdiction. Though jurisdiction is an issue in this case, the jurisdiction of the Bitcoin and the holder were not questions addressed.

The issues of jurisdiction in this case centred first on where the third and fourth defendants were domiciled and the Court’s jurisdiction to make a Norwich Pharmacal or Banker’s Trust order against them. In this respect, the Court considered this issue to be akin to an Order against a foreign bank. This issue was adjourned as the Applicant’s Counsel narrowed the application.

The second issue of jurisdiction was whether the claim form could be served out of the jurisdiction. In this regard they considered that the damage had been sustained within the jurisdiction i.e. the Applicant had paid money from an English bank account.

The issue of jurisdiction in relation to cryptoassets themselves remains untested, though the location of the company which provides the crypto wallet is likely to be an important factor.


This is not the first decision in the UK which has considered the status of cryptoassets as property. In Robertson v Persons Unknown [2019] and Vorotyntseva v Money-Ltd (T/A Nebus.com) [2018] the Court treated cryptocurrency as property, though neither considered the issue in depth.

This case however, makes a definitive statement in agreement with the Legal Statement and indicates that the Court will take it into consideration. This is a significant development in light of Mr Justice Bryan’s comment on the lack of assent to the Legal Statement and its status as guidance.

It is useful to see that the Court will view cryptoassets as property, and this allows them to be the subject of a variety of orders and injunctions. The Court appears to be taking the view that a proprietary claim over cryptocurrency is not akin to damages in fiat currency.

The Court has also shown an appreciation of the nature of cryptocurrency transactions and the speed at which they can be processed. Similarly, they have shown an understanding of the gravity of malware attacks and the risk of damage that repetitions of these.

These Orders do take a step to intruding on the integral anonymity of cryptoassets, but this is arguably outweighed by the intention of the wrongdoer and cushioned by the willingness to have the hearing in private.




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Robin Henry

Partner - Head of Dispute Resolution Services



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