Offshore Litigation Blog

The Judicial Committee of the Privy Council (the Board) has unanimously adjudicated on the remaining issues in the appeal from Cayman’s Court of Appeal, following its earlier preliminary judgment on reflective loss, which you can read about here.

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 12 May 2023, the BVI Court of Appeal handed down its decision dismissing an appeal against a decision by the High Court to discharge an interim freezing injunction against Kipford.

Since December 2022, there have been a number of reported cases of digital assets being mysteriously drained from users' wallets across different blockchains and affecting different platforms. One of the affected platforms, Metamask, has said that data shows 5,000 ETH (worth approximately US$10m) has already been stolen from various addresses across 11 blockchains. However, the root cause of the problem is unknown, with experts unable to identify a specific attack causing the losses.

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.