The English Court has now made a clear ruling; “I consider that cryptoassets such as Bitcoin are property“, Bryan J concludes in his judgment in AA v Persons Unknown.

The Court has granted another interim injunction over Bitcoin, this time held in an account of a cryptocurrency exchange after it had been transferred to the exchange as part of a cyber-attack on a Canadian insurance company.

Unlike the previous cases, which only act as persuasive authority on the matter (such as the one in our previous blog post), the Court here fully considered the issue of whether cryptocurrency is property and made a direct ruling on it. The judgement ratifies in English law the UK Jurisdictional Taskforce’s (“UKJT”) statement on the subject (published in November 2019), which otherwise has no formal status as a legal precedent on its own.

Background

The primary relief sought was an injunction to prevent the dissipation of Bitcoin as well as disclosure orders to allow the Applicant to identify the wrongdoers. In order to obtain proprietary injunction, it was necessary for the Judge to be satisfied that the Bitcoin were property.

Bitcoin as Property

The law traditionally recognises two types of personal property; items which could be possessed or those which give rise to a right that can be enforced through the Courts. Cryptocurrencies do not fit neatly into either category as they are intangible and do not themselves give rise to a right of action in the way that a contractual right or a debt would do.

Crucially, in this case, Bryan J was compelled by the UKJT’s analysis that cryptoassets meet the four criteria set out in Lord Wilberforce’s classic definition of property in National Provincial Bank v Ainsworth [1965] 1 AC 1175 as being definable, identifiable by third parties, capable in their nature of assumption by third parties, and having some degree of permanence.

Comment

The finding that cryptocurrencies are property under English law will have significant consequences for the application of a number of English legal rules, including those relating to succession on death, the vesting of property in personal bankruptcy, and the rights of liquidators in corporate insolvency, as well as in cases of fraud, theft or breach of trust.