On 20th August, law firm Stewarts said that it had obtained an order over cryptocurrency, saying that this is believed to be the first decision of its kind. Stewarts obtained an asset preservation order (APO) over Bitcoin worth more than £1 million stolen by fraudsters. In making the APO, it says, the court had to consider the most important unresolved legal issue about Bitcoin: is Bitcoin legal property (as opposed to mere data or information) and, if so, what kind of property is it? The article explains that English law divides personal property (as distinct from real property, i.e. land) into 2 conventionally recognised categories: “chose in possession” and “chose in action”. The first is a “thing” that you can take physical possession of, and the second is a property right that can only be obtained or enforced through legal action. It would seem that Bitcoin is neither. The decision apparently relied on a recent case in which it was held that Bitcoin are personal property that can be the subject of a trust. The article also says that there is also a good deal of academic and regulatory commentary that takes the view that Bitcoin must be “property”. It points out that the benefit of an APO is that requirements for a freezing order, such as apparent risk of dissipation, do not apply. It is enough that the court is satisfied that there is a serious issue to be tried concerning a proprietary claim. The judge also made Bankers Trust orders requiring the Bitcoin Exchange to disclose information about the cryptocurrency involved.
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