The UK High Court has officially classified Tether (USDT) as a form of property under English law. This ruling, delivered on September 12, 2024, is the first of its kind in the UK to follow a full trial.
High Court Ruling
The case involved a fraud victim who sought to recover stolen USDT that had been laundered through various cryptocurrency exchanges. Deputy Judge Richard Farnhill stated that Tether is a “distinct form of property.” It is not dependent on an underlying legal right. By declaring USDT as property, the court has allowed the stablecoin to be subject to trust claims. It can now also be traced like other assets.
Significance of the Ruling
This classification aligns with a previous 2019 court ruling that recognized cryptocurrencies as property. Additionally, a 2023 report from the England and Wales Law Commission supported treating digital assets as property, reinforcing this court’s decision.
UK's Efforts to Clarify Legal Status of Digital Assets
The ruling is significant as it comes at a time when the UK government is working to clarify the legal status of digital assets, including cryptocurrencies and NFTs. A recently introduced bill aims to ensure that digital assets are considered “things” and “personal property” under English law. This move is expected to help judges in future cases involving complex disputes, such as asset division during legal settlements or fraud recovery cases. Despite the landmark ruling, the plaintiff in this case, Fabrizio D’Aloia, was unsuccessful in fully recovering his stolen funds. His stolen 400,000 USDT had been transferred through crypto mixers. Therefore, it became difficult to trace the funds. Although the court acknowledged that he had been defrauded, D’Aloia could not provide enough evidence to prove that the Thai exchange, BitKub, had received his stolen assets.
The new court decision provides greater clarity on the legal regulation of digital assets in the UK, which could have significant implications for future legal cases in this area.
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