Following a recent judgment in a dispute over the ownership of an account worth around £30 million ($36.4 million), a legal expert has said that the English courts have swiftly adapted to the ever-increasingly complicated challenges concerning crypto assets.
Notably, there has been a “flurry” of cases brought before English courts in the years after the UK Jurisdiction Taskforce published its legal framework on crypto assets and smart contracts, according to a report by the international law firm Pinsent Masons on August 4.
As per Pinsent Masons legal director Jennifer Craven:
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“Many of those cases relate to freezing injunctions and disclosure orders obtained in support of the tracing and recovery of crypto stolen by fraudsters.”
“That English court leads the way in adjudicating on crypto-related disputes and other technological matters in an international context proves that English common law is well able to adapt to litigants’ needs.”
The case in question
This case arises as a result of HDR Global Trading Ltd. asking the High Court to decide whether the owner of an account established on HDR’s trading platform, BitMEX, belonged to Nexo or its former director, Georgi Shulev.
When Nexo’s board replaced Shulev as a director, HDR was forced to freeze the account, resulting in a dispute over possession of the account.
It highlighted the increasing prevalence of settlement agreements involving cryptocurrency or technology-related matters and the requirement for parties to a dispute to seek out the right legal competence.
“The case also shows the increasing use of settlement agreements involving crypto or tech-related issues, and the requirement for those in dispute to seek the right legal and technological expertise to drive forward litigation and get the right result,” Craven said
More than 800 Bitcoin in the account
The court was told that Shulev opened the account, which held more than 800 Bitcoin and is today worth over £30 million, using the email address associated with his firm.
Shulev claimed that he established the account in his personal capacity and that part of the cryptocurrency assets it included were his. However, Nexo maintained that the account was a business trading account and that all of the assets it contained belonged to the firm.
Ultimately, Shulev and Nexo reached a settlement before the High Court hearing, although its influence on the case was disputed.
Shulev was to give Nexo access, control, and ownership of his HDR account in exchange for $1 million, but Shulev eventually contended that the settlement agreement’s definition of ‘assets’ was too wide and ambiguous to be enforceable, allowing Nexo to add to what he was obliged to provide to justify not paying him.
Yet, the court decided that Shulev hadn’t fulfilled his part of the settlement agreement and had relinquished any rights to Nexo’s corporate trading account, ordering Shulev to transfer $10 million in crypto assets before Nexo paid $1 million in installments.
The court also ordered Shulev and Nexo to tell HDR that the account would be released to Nexo.