Tulip Trading Ltd is a remarkable cryptocurrency claim. Never before have the English courts had to grapple so deeply with what cryptocurrencies are and how they work. Nor has cryptocurrency litigation ever threatened to upend the cryptocurrency landscape so completely.
Key issues
The claimant ("TTL") alleges that it owns Bitcoin worth, at one point during the proceedings, approximately USD4.5 billion, and that the private keys needed to access the Bitcoin were deleted in a hack. TTL also happens to be owned by Dr Craig Wright and his family. Dr Wright is the infamous Australian computer programmer who purports to be Satoshi Nakamoto. Nakamoto, of course, being the author of the Bitcoin White Paper, which sets out how Bitcoin was to work.
TTL's claim is against software developers who it alleges exercise control over four separate Bitcoin blockchain networks. It alleges that the developers owe TTL fiduciary and tortious duties to restore TTL's access to the Bitcoin by amending the Bitcoin software. By way of analogy: TTL alleges that it has lost the keys to a safe, and is suing those who it says have the ability to break into the safe and rescue the contents.
The key issues in the claim go to the heart of cryptocurrency and its relation to the law. Do Bitcoin software developers owe such fiduciary or tortious duties to Bitcoin owners? If so, how would developers be required to manage the millions of ensuing claims?
Further, what would be the implications for Bitcoin of amending the software in the way sought by TTL? Is such an amendment consistent with the principles set out in the Bitcoin White Paper? Do Bitcoin software developers exercise sufficient control over the Bitcoin networks to ensure that Bitcoin users will accept such an amendment? Most broadly of all, should a court enter into these issues when the Law Commission is considering law reform in relation to digital assets?
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Originally published by Central London Lawyer.
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