Andrew Maguire, instructed by Steven Murray of Harrison Clark Rickerbys’ (HCR) crypto asset recovery team, recently obtained the first reported order for summary judgment in a crypto case, from the High Court of England and Wales, which secured the return of fraudulently obtained Bitcoin (BTC) to the value of £1.85M. It is also the first summary judgment to be served by NFT Airdrop into the relevant wallet.
The client fell victim to a highly sophisticated online scam, designed to encourage investment in cryptocurrencies, behind the now abandoned cryptocurrency trading platform ExTick Pro. With the assistance of crypto tracing experts CiRO, the BTC was traced to a wallet and the client was able to ultimately recover all his BTC.
Rather than investing the BTC on the platform, the cryptocurrency was transferred away to digital wallets – operated by Huobi Global Ltd – in the hands of the fraudsters. Thanks to a freezing order on persons unknown, a proprietary freezing order on the wallet and a Banker’s Trust Order against Huobi to disclose identities of the persons unknown – together with a claim against all the defendants seeking delivery up of the BTC acquired through deceit and held under a constructive trust by Huobi – the summary judgment was granted and monies (c.£1.85 million) recovered.
The decision is important as it demonstrates the English Courts’ commitment to embrace change and benefit from new technology, such as service by NFTs, in legal proceedings, providing a practical and sensible step forward to assisting victims of fraud. In addition, the trust rule in Saunders v Vautier (1841) 4 Beav 115 ie to terminate the (constructive) trust and Huobi’s role as trustee, was utilised so as to ensure that the wallet provider transferred the BTC.
Steven Murray, Partner at HCR who represented the client in this case, said: “There is no doubt that this legal development will be a welcomed approach for investors in crypto who wish to seek to trace and recover crypto assets, whilst also being a loud warning for fraudsters that have until now hidden behind the blanket of online anonymity. A path has now been cleared for future victims of crypto asset fraud to pursue ‘Persons Unknown’ and have a hope of recovery where they otherwise previously could not.”
The Hon J Brazier of The CiRO Group, ROAR, and M2 Recovery commented: “This is a tremendous result, which has used several new tactics in global asset recovery, including the service by NFT, and one with several complicating factors involved in recovering the money in this case. The wider team who worked on this should be commended and used as a standard to be held to. I am highly impressed by the professionalism of this team, especially Steven Murray and Andrew Maguire. This case demonstrates the importance of choosing the right team. We are certainly proud to have been able to play our part.”