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Crypto exchanges ordered to help trace stolen assets

A recent High Court decision has signalled hope for the victims of crypto fraud.

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Published 2 December 2022

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The claimant company lost over $10m in cryptoassets to hackers who had obtained access to its systems. Although an expert was able to trace the stolen crypto (using proprietary software and public records) to various wallet addresses, the identities of the wallet holders remained a mystery.

The High Court ordered that a number of overseas based cryptocurrency exchanges should assist the victim to identify fraudsters by providing the following information in relation to accounts linked to the suspect wallets:

– the name in which the accounts are held;

– all ‘Know Your Customer’ information and documents provided in had respect of the accounts; and

– any other information and documents held in relation to the accounts that could identify the holders of the accounts, including email addresses, residential addresses, phone numbers and bank account details.

The exchanges in question (Bitflyer, Binance, Payward, Luno, Coinbase and Huobi) were also ordered to provide explanations, to the best of their knowledge, about what had become of the stolen cryptoassets.

It is hoped that this information will ultimately assist the claimant company to recover its assets via further Court proceedings in the jurisdiction/s where they are located.

If you would like specific advice about how the Court’s decision might impact your own position, please contact Robin Henry or Jean-Martin Louw for a confidential discussion.

The full text of the judgment is available here.

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Shorter Reads

Crypto exchanges ordered to help trace stolen assets

A recent High Court decision has signalled hope for the victims of crypto fraud.

Published 2 December 2022

Associated sectors / services

Authors

The claimant company lost over $10m in cryptoassets to hackers who had obtained access to its systems. Although an expert was able to trace the stolen crypto (using proprietary software and public records) to various wallet addresses, the identities of the wallet holders remained a mystery.

The High Court ordered that a number of overseas based cryptocurrency exchanges should assist the victim to identify fraudsters by providing the following information in relation to accounts linked to the suspect wallets:

– the name in which the accounts are held;

– all ‘Know Your Customer’ information and documents provided in had respect of the accounts; and

– any other information and documents held in relation to the accounts that could identify the holders of the accounts, including email addresses, residential addresses, phone numbers and bank account details.

The exchanges in question (Bitflyer, Binance, Payward, Luno, Coinbase and Huobi) were also ordered to provide explanations, to the best of their knowledge, about what had become of the stolen cryptoassets.

It is hoped that this information will ultimately assist the claimant company to recover its assets via further Court proceedings in the jurisdiction/s where they are located.

If you would like specific advice about how the Court’s decision might impact your own position, please contact Robin Henry or Jean-Martin Louw for a confidential discussion.

The full text of the judgment is available here.

Associated sectors / services

Authors

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