13 May 2022
Is cryptocurrency a help or a hindrance in security for costs applications? Sonia Kenawy examines the court’s approach thus far
- The High Court has rejected a claimant’s offer to provide security for costs by way of transfer of Bitcoin, as the volatility of the cryptocurrency’s value meant that the security ran the risk of being rendered meaningless.
- It will nonetheless be interesting to note whether there may be scope for cryptocurrency to meet the test for security in future applications.
In Tulip Trading Ltd v Bitcoin Association for BSV [2022] EWHC 2 (Ch) and [2022] EWHC 141 (Ch)—proceedings that have been watched closely by the cryptocurrency community as well as legal practitioners—the High Court has provided novel guidance on the interaction between cryptocurrency and security for costs.
The claimant, a Seychelles-incorporated company, was seeking over USD$4.5bn (£3.29bn) of Bitcoin and other cryptocurrencies. Dr Craig Wright is an Australian computer scientist who claims to be the inventor of Bitcoin under the pseudonym Satoshi Nakamoto. He, together with his family, are the ultimate beneficial owner of the claimant. The defendants are all open-source
