Judgment has been handed down in D’Aloia v Persons Unknown, Bitkub & Ors [2024] EWHC 2342 (Ch). Darragh Connell and Eoin MacLachlan, instructed by Nicola McKinney of Quillon Law, acted on behalf of a crypto exchange, Bitkub Online Co. Ltd (“Bitkub”), in successfully defending a claim brought by Fabrizio D’Aloia.

Following a 5-day trial, the High Court held that the Claimant had failed to establish that any of his misappropriated USD Tether had reached the relevant wallet controlled by Bitkub, the sixth Defendant in the proceedings. The entirety of the Claimant's claims against Bitkub in unjust enrichment and as an alleged constructive trustee were dismissed.

The judgment considers, for the first time following a contested trial, the status of USD Tether under English law. The High Court concluded that USD Tether did constitute property for the purposes of English law as follows:

[5] USDT attract property rights under English law. It is neither a chose in action nor a chose in possession, but rather a distinct form of property not premised on an underlying legal right. It can be the subject of tracing and can constitute trust property in the same way as other property.

and

[173] Accordingly, in my view USDT, while neither a chose in possession nor a chose in action, is capable of attracting property rights for the purposes of English law. Those rights attach to the USDT itself, rather than the right to control it, for example the right to use the private key.

The court’s finding in respect of the status of USD Tether echoes other interim decisions as to the status of digital assets as property including, AA v Persons Unknown [2020] 4 W.L.R. 34 in which Darragh Connell also appeared as counsel.

A copy of the judgment is available here.