- Home
- News & Insights
- Insights
- Disputes Quick Read: extensive information orders granted against crypto exchanges following hack
- Auf dieser Seite
19. Januar 2023
Disputes Quick Read – 39 von 101 Insights
Disputes Quick Read: extensive information orders granted against crypto exchanges following hack
The significant judgment of Mr Justice Butcher in LMN v Bitflyer Holdings Inc and others further demonstrates the ability of the English courts to assist victims of crypto fraud. It is also the first example of English courts granting permission for information orders to be served outside of the jurisdiction under the Civil Procedure Rules' (CPR) new service gateway. It also provides helpful guidance as to when the English court will have jurisdiction over crypto disputes.
Background
LMN, a crypto exchange, was subject to a hack which resulted in millions of dollars' worth of crypto currency being transferred out of its wallets.
LMN's expert was able to trace the transactions on the relevant blockchains up to the point at which the transactions reached exchange addresses at a number of crypto exchanges. LMN argued that they needed information from the crypto exchanges, which were based out of the jurisdiction, to further trace and recover the cryptocurrency.
Information orders
LMN made an application for Bankers Trust orders to be made against the exchanges. Bankers Trust orders are third party information orders which are usually sought where there has been a fraud and the applicant seeks information from a third party to assist it with identifying the wrongdoer and/or tracing assets.
LMN was unable to identify the specific entities which controlled the exchanges, and so its application was brought against the companies it believed to be the holding companies for each exchange based on public records.
Mr Justice Butcher granted extensive information orders requiring the exchanges to provide information obtained for the accounts for KYC purposes and information regarding the activity of certain accounts. The orders were granted on the basis that there was a good arguable case that whoever held the cryptocurrency following the hack did so as a constructive trustee for LMN.
Jurisdiction
Service out of the jurisdiction
In order to obtain permission to serve the Claim Form out of the jurisdiction, LMN needed to show that: (i) there was a serious issue to be tried on the merits, (ii) there was a good arguable case that the claim fell within one of the "gateways" under the CPR, and (iii) England and Wales was the appropriate forum for the claim to be tried.
The court granted LMN permission to serve the information orders on the exchanges on the basis that these requirements were satisfied including the new CPR gateway for service which is specifically aimed to assist in this kind of case (paragraph 3.1 of Practice Direction 6B of the CPR). This allows service out of the jurisdiction where a claim or application is made for disclosure in order to obtain information regarding: (i) the true identity of a defendant or a potential defendant; and/or (ii) what has become of the property of a claimant or applicant.
England as the appropriate forum
Mr Justice Butcher held that there was a good arguable case that law of England and Wales was the applicable law on the basis that, at the time of the hack, LMN was resident in England & Wales and carried out its business here. LMN also suffered damage (or loss) in England & Wales as the cryptocurrency was taken from its control there. England was also found to be the proper place for an action to be brought taking into account the connection with England.
This approach to jurisdiction is consistent with the approach taken in earlier crypto cases such as Tulip Trading.
In dieser Serie
Wirral Council v Indivior plc: Court of Appeal upholds strike out of opt-in representative action securities claim
30. January 2025
What are the litigation trends in 2025?
22. January 2025
von mehreren Autoren
Changes to the privilege rules between companies and shareholders
6. December 2024
Victory for energy companies/defeat for the environment?
14. November 2024
von Tim Strong, Kate Hamblin
Failure to prevent fraud offence to come into force in September 2025
14. November 2024
von Emma Allen
Non-Disclosure Agreements - updated guidance from the SRA
8. November 2024
von Edward Spencer
Essex Cricket Club charged by Cricket Regulator
30. October 2024
von mehreren Autoren
UK introduces mandatory reimbursement rules to combat APP fraud
15. October 2024
von Emma Allen, Andrew Spencer
Important environmental ruling?
16. July 2024
von Tim Strong, Kate Hamblin
Notice of Claim: What constitutes 'reasonable detail'?
5. July 2024
von Stuart Broom, Tom Charnley
New SFO Director announces bold plans to tackle fraud
21. March 2024
von Emma Allen, Amy Cheng
What are the litigation trends for 2024?
1. February 2024
von Katie Chandler, Emma Allen
ClientEarth v FCA: Challenging Regulator Decisions
12. February 2024
von Tim Strong, Nicole Baldev
First of its kind judicial guidance on the use of AI in the courts
14. December 2023
Witness familiarisation - does it affect the court's assessment of witness credibility?
13. December 2023
The use of AI in Trial Witness Statements post-PD 57AC
23. October 2023
von mehreren Autoren
CAT to hear the first application for a collective settlement approval order
17. October 2023
Pre-Action Protocols – what is different?
12. September 2023
von Tom Charnley
Failure to prevent fraud – a new offence?
14. August 2023
von mehreren Autoren
Supreme Court rules that APP fraud victims cannot rely on Quincecare Duty
4. August 2023
von mehreren Autoren
The Law Commission's Consultation Process on the Arbitration Act 1996 – taking stock
21. July 2023
What does the latest decision of the CAT in the Mastercard/Visa proceedings mean for class actions?
10. July 2023
Disputes Quick Read: ClientEarth refused permission to pursue directors of Shell
1. June 2023
von mehreren Autoren
Disputes Quick Read – developments in the fixed costs regime
3. May 2023
von James Bryden
Disputes Quick Read: Service by email – are the rules any clearer?
20. April 2023
von James Bryden
Disputes Quick Read: Breaking the north/south divide?
5. April 2023
von Tom Charnley
Disputes Quick Read - What do practitioners think about making alternative dispute resolution (ADR) compulsory?
8. March 2023
Disputes Quick Read: What are the litigation trends for 2023?
2. March 2023
von Katie Chandler, Emma Allen
Disputes Quick Read: further guidance on witness statement preparation rules
14. February 2023
Disputes Quick Read: A cautionary tale – settlement agreement (un)wittingly releases all claims for fraud
13. February 2023
Disputes Quick Read: Why the UK should join the Hague Judgments Convention 2019
8. February 2023
von Jessie Prynne
Disputes Quick Read: extensive information orders granted against crypto exchanges following hack
19. January 2023
von Georgina Jones
Disputes Quick Read: A new approach to giving evidence? WhatsApp with that?
3. October 2022
von Gemma Broughall
Disputes Quick Read: Ethereum Merge - what legal issues arise?
22. September 2022
von Ben Jones, Emma Allen
Disputes Quick Read: New obligations on cryptobusinesses to report under the UK sanctions regime
9. August 2022
von Nick Maday
Disputes Quick Read: Disclosure - What information can be redacted?
25. July 2022
von Edward Spencer
Disputes Quick Read: what claims exist when a smart contract is breached?
6. July 2022
von Emma Allen
Disputes Quick Read: New gateway for serving Norwich Pharmacal Orders and Bankers Trust orders out of the jurisdiction
Welcome news for those pursuing fraud claims in the English Courts
28. July 2022
Disputes Quick Read: Disclosure Pilot Scheme – here to stay
21. July 2022
von Edward Spencer
Disputes Quick Read: Defining the duty - the limits of the responsibility assumed by professionals
27. July 2022
von Stuart Broom
Disputes Quick Read: Climate change litigation – successful challenge to government's Net Zero Strategy
29. July 2022
von Jess Thomas, Lucy Waddicor
Disputes Quick Read: Judicial Review and Courts Act 2022 – now in force
17. June 2022
von Stephanie High
Disputes Quick Read: an important reminder of the duty to disclose electronic documents in native format
13. June 2022
von Edward Spencer
Disputes Quick Read: ENRC prevails in claim against former solicitor
26. May 2022
Disputes Quick Read: Climate change litigation update – McGaughey v Universities Superannuation Scheme Limited
31. May 2022
von mehreren Autoren
Don't lose your keys: Bitcoin developers do not have a duty to assist owners in recovering lost cryptocurrency
4. April 2022
Disputes Quick Read: The new witness statement preparation rules – a year on
5. April 2022
von Stephanie High
Disputes Quick Read: ClientEarth v Shell – climate change litigation shifts focus to UK companies
31. March 2022
von mehreren Autoren
Disputes Quick Read: High Court rules that failure to provide adequate data security is not a positive act
21. September 2021
Disputes Quick Read: Key changes to the Disclosure Pilot Scheme
13. September 2021
von Edward Spencer
Disputes Quick Read: Judicial Review and Courts Bill – unpacking the UK government's proposed amendments
6. September 2021
von Stephanie High
Disputes Quick Read: Will litigants be compelled to participate in alternative dispute resolution?
2. August 2021
Disputes Quick Read: Freezing injunctions – maximum custodial sentence imposed for breach
21. July 2021
Disputes Quick Read: The online future of civil justice – the end of the legal profession or the end of legal drudgery?
15. July 2021
von Jess Thomas
Disputes Quick Read: Will the courts change forever post-COVID?
26. May 2021
von David de Ferrars
Disputes Quick Read: One Blackfriars administrators cleared of misfeasance
5. May 2021
von Stephen O'Grady
Disputes Quick Read: Not your prerogative – the Independent Review of Administrative Law reports its recommendations on judicial review
21. April 2021
von Stephanie High
Disputes Quick Read: Amendments to the Disclosure Pilot Scheme – a step in the right direction
31. March 2021
Disputes Quick Read: UK Supreme Court rules on the territorial extent of the SFO's powers
26. February 2021
von Tim Strong
Disputes Quick Read: No dropping anchor – parent company liability for environmental claims
24. February 2021
Disputes Quick Read: What lawyers need to know about new witness statement preparation rules
20. January 2021
von Stephanie High
Disputes Quick Read: Should you still choose the English courts to have jurisdiction in your international contracts after Brexit?
12. January 2021
von Tim Strong
Disputes Quick Read: Privilege lost in the EU post-Brexit (with exceptions)
23. November 2020
Disputes Quick Read: Law on interest applicable to US dollar awards reaffirmed
16. October 2020
Disputes Quick Read: Care required when drafting SPA claim notices
23. September 2020
Disputes Quick Read: Why the modernised LCIA rules are a welcome update
7. October 2020
von Nick Storrs
Disputes Quick Read: The importance of proper service
26. May 2020
von Edward Spencer
Disputes Quick Read: government guidance for contracts impacted by COVID-19
12. May 2020
Disputes quick read: Mandatory changes to Statements of Truth
18. May 2020
von Katie Chandler
Disputes Quick Read: COVID-19 and supply chain disruption – key issues
9. April 2020
von mehreren Autoren
Disputes Quick Read: High Court orders parties to explore options for 5-week remote trial
15. April 2020
Disputes Quick Read: Tomlin Orders – ensuring the confidentiality of settlement terms
27. April 2020
von mehreren Autoren
Disputes Quick Read: UK's OFSI fines Standard Chartered Bank £20 million for sanctions breaches
21. April 2020
von Stephanie High
Disputes Quick Read: A different approach to witness evidence
11. March 2020
von James Bryden
Disputes Quick Read: Coronavirus - a growth in virtual courts?
17. March 2020
von Stuart Broom
Disputes quick read: climate change activism by litigation
26. February 2020
von Tim Strong, Andrew Howell
Disputes Quick Read: Commercial Court's arbitral power shift
21. February 2020
von Andrew Howell
Disputes Quick Read: Court stays evictions during COVID-19 – is this lawful?
2. June 2020
von Georgina Jones
Disputes Quick Read: Will the civil justice system change forever post COVID-19?
16. June 2020
von Georgina Jones
Disputes Quick Read: Privilege waiver warning
2. July 2020
von Tim Strong, Georgina Jones
Disputes Quick Read: Retailers reign supreme in Visa and Mastercard proceedings
9. July 2020
Disputes Quick Read: The contra proferentem rule reconsidered?
21. July 2020
Disputes Quick Read: Scope of duty and the SAAMCo counterfactual following Manchester Building Society
3. December 2021
Disputes Quick Read: Facilitating transactions in cryptoassets - Lord Leggatt and the point of commercial law
24. November 2021
von Stuart Broom
Disputes Quick Read: Privy Council clarifies the law on freezing injunctions in aid of foreign proceedings
8. October 2021
von Katie Chandler
Disputes Quick Read: Climate change litigation – what's the latest?
10. January 2022
von Tim Strong, Jess Thomas
Disputes Quick Read: Court decisions on the Disclosure Pilot Scheme – the 2021 roundup
20. January 2022
Disputes Quick Read: Climate change litigation update
8. March 2022
von Jess Thomas, Lucy Waddicor
Disputes Quick Read: Assumption of responsibility - tax schemes and investors
22. March 2022
Disputes Quick Read: Dealing in crypto? Be careful what you call it
7. April 2022
von Emma Allen, Georgina Jones
Related Insights
Do Bitcoin developers owe fiduciary duties to Bitcoin owners?
von mehreren Autoren
Disputes Quick Read: Dealing in crypto? Be careful what you call it
von Emma Allen und Georgina Jones
Cryptoasset fraud: Squid coin rug-pull and tracing cryptoassets
von Emma Allen und Georgina Jones