Содержание
On 20 January 2022, the English High Court handed down a judgment on an application for an injunction in Sally Jayne Danisz v Persons Unknown and Huobi Global Ltd (T/A Huobi) [2022] EWHC 280 (QB).
The court prohibited any dealings with the stolen Bitcoins. Also, it ordered the cryptocurrency exchange Huobi to disclose the identity of the wallet’s owner to which the Bitcoins were deposited.
Background
In October 2021, Sally Denise bought Bitcoins through a website called Matic Markets. Matic’s website is no longer available. It appears that Matic promised investors some profit for storing Bitcoins on Matic’s wallets. Matic also promised that investors could withdraw Bitcoins to their wallets anytime.
Sally invested almost £27k in October-November. In December, she decided to withdraw her BTC along with the “profits”. However, Matic refused to do so. According to WebArchive, Matic’s site was already down on 15 December.
Sally subsequently discovered that her Bitcoins had been withdrawn from a Matic address. One of the addresses to which 0.109998 BTC were withdrawn belonged to Huobi.
Sally went to the lawyers. As it was (and probably still is) unknown who was behind Matic, Sally filed claims against unknown persons (yes, you can do that in England) as well as against Huobi.
What the court decided
On 20 January 2022, the High Court issued a judgment on interim measures. The court ruled:
- Prohibit Huobi and unknown persons from doing anything with Sally’s property
- Grant a Worldwide Freezing Order (WFO)
- Require Huobi to disclose details of the user who received Sally’s Bitcoins
If the Huobi user is associated with Matic, the “persons unknown” will soon become very well known.
The judgment was handed down without notice to the defendants (ex parte). Usually, the defendant has two weeks to challenge the judgement on a return date hearing. It appears that the judgment has not been challenged. The court has yet to consider the dispute on the merits, but it will likely rule in Sally’s favour.
Why it’s important
Getting an injunction in an English court is difficult, especially against a foreign company. For example, to get a WFO, you must prove the asset dissipation risk. However, even if the defendant has stopped paying or responding, this does not mean there is a risk per se.
In this case, Sally proved the risk of dissipation largely because of the blockchain. Since the transactions are public, Sally (or an expert involved) traced them and proved that the assets had been withdrawn. In other words, it helped Sally that the fraudsters were working with cryptocurrencies. In a way, this shows that sometimes (though some would say always) paying in cryptocurrency is safer than paying in fiat money.
Another element needed to be proven is urgency. There was no problem with this either. The judge commented:
This is a form of transaction whereby, at the click of a mouse, an asset can be dissipated.
Mr Justice Lane
However, withdrawing money from a bank account is not much more difficult. Except that there will be a bit more clicks.
The court also confirmed:
- For the purpose of granting interim injunctions, Bitcoin and other cryptocurrencies are a form of property capable of being the subject of a proprietary injunction (such as WFO). The court referred to AA v Persons Unknown, Re Bitcoin [2019] EWHC 3556) in this regard.
- The law applicable to cryptocurrencies is the law of their owner’s location (Ion Science Ltd v Persons Unknown (unreported, 21 December 2020). Sally could file a claim in the High Court because she lived in England. The court also considered that Sally was paying for Bitcoins from an English bank account. That said, the crypto-exchange Huobi is registered in Seychelles, and the location of the “unknown persons” was, oddly enough, unknown.
Conclusion
Courts seem to be more willing to impose injunctions in cryptocurrency disputes. Since this is a new field and there is indeed a lot of fraud, it looks like judges are treating cryptocurrencies with some scepticism, if not suspicion.
It is worth noting Sally’s principled approach to the dispute: with a small claim and dim prospects, she tried to assert her rights anyway. Obtaining injunctions and hiring experts in England is often expensive. Sally’s total costs could easily exceed half of her claim, if they haven’t already.
