In a landmark ruling, the UK High Court has classified the stablecoin Tether as property, marking the first such ruling on cryptocurrency under English law following a complete trial process. The case surfaced in the wake of an individual suffering from a fraud case in which the victim’s stolen crypto, including Tether, were processed through cryptomixers before being dumped across various crypto exchanges.
The Deputy Judge handling the case, Richard Farnhill, confirmed that Tether would be treated as property from a legal perspective under English law. He stated that Tether is a distinct form of property, and not rooted in any existing legal right, thus allowing it to be traced and handled like other forms of property.
This ruling echoes a decision from a similar judgement on cryptocurrencies as property in 2019, and is in alignment with the stance set by the English and Wales Law Commission in a 2023 report on digital assets. Additionally, this development follows a bill the UK government put forward aiming to define NFTs (Non-Fungible Tokens), cryptocurrency, and carbon credits as personal property under property legislation.
The plaintiff of the case, Fabrizio D’Aloia, unfortunately did not present sufficient proof that BitKub, a Thai crypto exchange platform, was unjustly enriched with 400,000 USDT, 46,291 of which purportedly was tracked back to D’Aloia’s fraudsters. Thus, Deputy Judge Farnhill didn’t see any transaction between D’Aloia and BitKub as faulty.
Lastly, Matt Green of Lawrence Stephens, suggested that this case should serve as a warning for analytic reports providers to ensure evidence is clearly laid out for courts. He also emphasized the importance of legal teams fully comprehending the facts to defend property claims and appropriately handle mixing concerns. Orders consequent to this ruling are anticipated to be heard at a future date.