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Digital developments in focus
| 4 minutes read

That's my crypto – fork it over!

How far would you go to get your hands on billions of pounds worth of cryptocurrency?  Dr Craig White, who also claims to be Satoshi Nakamoto (the anonymous visionary behind the bitcoin project) is continuing his quest to get control of a vast quantity of bitcoin he (or rather his associated company, Tulip Trading) claims to own.

The court of appeal’s judgement in the case of Tulip v Van der Laan and ors is the most recent episode of this saga. For a more detailed look at the High Court judgement, see our previous article.

The Facts

Tulip Trading claims to be the "true owner" of bitcoin worth ~£2bn at two addresses.

Dr White claims that persons unknown hacked into his computer, copied the (encrypted) zip file containing the private keys required to access the bitcoin at those addresses, and then deleted it, leaving him unable to access the funds.

However, the hackers are unable to access the bitcoin, as the zip file was itself encrypted. It is therefore sitting in limbo with nobody able to access it.

Fiduciary Duties

This case is a novel attempt to recover control of this bitcoin. Tulip Trading is not seeking a remedy against the unknown hackers or an exchange (as in the case of AA v Person Unknown).  Instead, it claims that the developers of the bitcoin networks (actually 4 different networks) have the technical capability and control of the network necessary to return control of the bitcoin to Tulip Trading, and that they owe Tulip Trading a duty to do so.

As Tulip Trading does not have a contractual relationship with the developers, it is seeking to extend and rely on the law of fiduciary duties (more usually seen in the worlds of trusts and banking) to help its cause. It claims that the developers who control the code base of a cryptocurrency owe fiduciary duties to the "true owners" of the relevant crypto currency.

Tulip Trading’s contention is that these novel fiduciary duties could extend to a positive duty in this situation to take steps to return control of the cryptocurrency to the "true owner" (if a court has made a declaration of ownership in favour of that “true owner”).

Points of Contention

The High Court case and this appeal are both concerned with Tulip Trading seeking to serve proceedings on the bitcoin developers, who are all outside of the jurisdiction. This is therefore not a full court hearing (and appeal) based upon an evaluation of the facts. Instead, Tulip Trading must meet a much lower bar, and show that its position is at least arguable.

While the High Court did not think it was, and refused permission, the Court of Appeal overruled this, deciding there is a serious case to be tried. Birss LJ held that it is not unarguable that this kind of fiduciary duty could exist, and that such a duty could require this kind of action from the developers.

Ultimately, the Court of Appeal's view comes down to a question of fact as to whether bitcoin (and by extension any cryptocurrency or digital asset) is truly decentralised, given the particular apparent power the bitcoin developers have. 

The developers might (and do) claim that their power is in fact very limited, as the other network participants (e.g., miners) would not accept a software update which had this kind of effect. However, this is a question of fact which will now be determined at trial.

Next Steps

Given the large value of bitcoin which is at stake (even with the more recent fall in value of bitcoin more generally), this case is not going to go away quietly.

It is expected to go back to the High Court for a full trial. Ultimately the High Court will have to scrutinise the facts carefully; there will be a lot of contested factors. Can Tulip Trading prove "true ownership?  Can they establish that decentralised governance really is a myth, as suggested by the Court of Appeal? Would the requested remedy actually be effective?

It is worth noting that one of the blockchain networks, BSV, claimed last summer that they have settled with Tulip Trading, and have implemented software allowing “a Notary Service Provider to verify court orders asserting the rightful ownership of coins misappropriated in hacking incidents”.  The Notary Service Provider would then broadcast that message for miners to implement.

However, this presumably still requires Tulip Trading to obtain a court order verifying ownership of the hacked bitcoin in question. 

Wider implications? 

More generally, should developers of open-source software (whether individual or companies) be worried about this move towards developers potentially being held to duties unimaginable when they took on this role?

From the Court of Appeal's judgement, the possibility of a fiduciary duty being arguable is very much a consequence of the adjacency with the cryptocurrency as a digital asset and “property” (the software is the asset, as the Court of Appeal expressed it). Developers who are not maintaining the codebase of a digital asset should therefore arguably not be overly concerned about this decision.

For developers of digital assets more generally, this seems part of a trend towards greater regulation. In its recent consultation on the future financial services regulatory regime for crypto assets, HM Treasury suggests that if software developers of decentralised finance offerings go on to maintain, run and operate systems used for regulated financial activities (like exchange or lending), then they should be subject to financial services regulation.


The Tulip Trading case highlights the complex issues surrounding ownership and control of digital assets in the world of cryptocurrency. It remains to be seen how the High Court will rule on the facts of the matter, but the case raises important questions about the responsibilities of developers and the potential for greater regulation in the industry.

“The internet is not a place where the law does not apply” Birss LJ at [83]


open source, blockchain and smart contracts, cryptoassets, emerging tech, fintech, regulating digital