Cryptocurrency news: UK courts can freeze stolen blockchain – fraudsters dealt blow | UK | News

In a landmark ruling, the High Court said Worldwide Freezing Orders (WFOs) could be used to stop disputed cash being moved while a decision is made on who, if anyone, is at fault. WFOs have been used for years in conventional criminal cases – while a court decides who is the rightful owner of the disputed goods.

But victims of crypto crime were often powerless to get their money back because blockchains are stolen by anonymous fraudsters who could be anywhere on the planet.

There had been questions over whether WFOs could be applied in the case of alleged cryptocurrency theft – because of the difficulty of assessing who has been accused of stealing them.

But in a landmark case the High Court ruled that cryptoassets, such as Bitcoin, counted as property for the purposes of the order.

It was also satisfied that it had the jurisdiction to grant the proprietary injunction and WFO against an unknown person as the description of the fraudsters was considered sufficiently clear to establish who was and was not included within the relevant group.

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And if the accused were unknown, the court will instead issue a third-party disclosure order (referred to as a Bankers Trust Order) against the cryptocurrency exchanges.

The case relates to the alleged theft of £250,000 of Bitcoin from Ion Science Limited and its owner Duncan Johns.

According to law firm RPC, the case “has been viewed as a possible blueprint for future claims, particularly given the increased prevalence of cryptocurrency fraud, alongside its increasing publicity and rapid rise in value”.

It added: “The court has demonstrated that it is prepared to treat cryptoassets as property and to grant proprietary injunctions where those assets are misappropriated, as well as third party disclosure orders to determine the identity of the fraudster(s).”

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The news emerged as WFOs have become an increasingly common way of cracking down on cross-border crime in recent years.

In the past four years alone around £9billion has been frozen in assets by the High Court.

Freezing orders are used by the courts to prevent suspected criminals hiding their assets and potentially avoiding any requirement to compensate their victims.

UK courts are unusual in being able to issue freezing orders that cover assets anywhere in the world.

These so-called “Mareva injunctions” are made possible by the acceptance of English law in jurisdictions around the world.

As a result, litigants in international disputes are keen to bring their cases to the UK because they have a better chance of recovering stolen assets.

A review of legal journals shows that hundreds of WFOs have been brought by law firms in London in recent years while the size of orders has also been increasing.

However, they have not always been successful.

In 2018, the Republic of Djibouti was granted a £73million WFO against Abdourahman Mohamed Mahmoud Boreh but it subsequently emerged that the date of telephone transcripts used in evidence had been changed.

This apparent faking of the evidence had been known to Djibouti’s representative, Peter Gray of the law firm Gibson Dunn.

Mr Gray was found to have deliberately and dishonestly misled the court and he was struck off as a solicitor in May 2021.

Despite these setbacks, it is likely that freezing orders will remain a vital legal tool given the ease with which money and assets can be moved around the world.



This news is republished from another source. You can check the original article here

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