Offshore Litigation Blog

In a recent decision the English High Court discharged a proprietary injunction that enjoined Binance from dealing with the proceeds of a scam. In doing so, the court warned against assuming that cryptocurrency exchanges act as constructive trustees of misappropriated digital assets.

The English Court of Appeal has in the recent judgment of Investment Bank PSC v El-Husseini examined the purpose and scope of section 423 of the Insolvency Act (the IA), which deals with transactions defrauding creditors.

Harneys contributed the British Virgin Islands chapter in the Chambers 2023 International Fraud & Asset Tracing Global Practice Guide. The guide provides the latest legal information on fraud claims, disclosure of assets, shareholders’ claims against fraudulent directors, overseas parties in fraud claims, rules for claiming punitive or exemplary damages and laws to protect banking secrecy.

On 31 March 2023, in the case of Re Gatecoin Limited (in liquidation), the Honourable Madam Justice Linda Chan of the Hong Kong Court of First Instance ruled on an application by the liquidators of Gatecoin seeking directions on the characteristics of cryptocurrencies and fiat currencies and whether the cryptocurrencies held should be regarded as being held on trust for Gatecoin’s account holders. The decision brings Hong Kong in line with other common law jurisdictions whose courts have already decided that issue, including England and Wales, New Zealand and the BVI. This is further acceptance by the common law courts that, despite their unusual features, cryptocurrencies and digital assets do not sit outside of the law.

In the recent decision of Charles Peterson et al v Douglas Riegels et al the Eastern Caribbean Court of Appeal remind us of how high the bar is when an appellant seeks to impugn the exercise of discretion by a first instance judge.

In the latest decision in the Tulip Trading litigation ([2023] EWCA Civ 83), the English Court of Appeal has held that the question of whether developers of Bitcoin networks owe fiduciary duties to Bitcoin owners is a "serious issue to be tried", leaving the door open for an expansion of the law on fiduciary duties that could trigger a wave of new digital asset claims.

January 2023 has seen some significant changes to the BVI companies legislation that has come into effect providing a pathway for stakeholders to obtain disclosure of the financial position of BVI companies and to identify those in management positions.

The English Commercial Court recently gave summary judgment in Gary Jones v Persons Unknown et al [2022] EWHC 2543 (Comm), in which it found that Huobi Global Limited (Huobi), an exchange registered in Seychelles, was constructive trustee of the Claimant’s stolen Bitcoin.

On 24 Mar 2021, the Court of Appeal handed down judgment in Mitsuji Konoshita and A.P.F. Group Co Ltd v JTrust Asia Pte Ltd (BVIHCMAP 2020/0017), leaving helpful guidance on discharging freezing and receivership orders from material changes in circumstances.