Legal News

Company held by Bitcoin ‘inventor’ ordered to post security in £4bn hacking claim (Tulip Trading Ltd v Bitcoin Association for BSV)

Published on: 25 January 2022
Published by: LexisPSL
  • Company held by Bitcoin ‘inventor’ ordered to post security in £4bn hacking claim (Tulip Trading Ltd v Bitcoin Association for BSV)
  • What are the practical implications of this case?
  • What was the background?
  • What did the court decide?
  • Case details

Article summary

Dispute Resolution analysis: Master Clark has handed down a judgment in respect of an application for security for costs in the highly publicised litigation between Tulip Trading Ltd (Tulip) (a Seychelles company that had held approximately $4.5bn of the cryptocurrency, Bitcoin, before the ‘private keys’ to access and control this Bitcoin were stolen) and sixteen defendant software developers. The security application pertained to an imminent hearing to determine whether an order granting permission to serve the claim documents on them out of the jurisdiction should be set aside. The applicants succeeded in establishing that Tulip was impecunious (CPR 25.13(2)(c)) and on that basis alone the security was granted. The applicants also argued that security should be granted because (i) Tulip was a ‘nominal’ claimant within the meaning of CPR 25.13(2)(f); (ii) Tulip was not resident within the jurisdiction pursuant to CPR 25.13(2)(a); and (iii) the claimant had taken steps in relation to its assets that would make it difficult to enforce an order for costs against it pursuant to CPR 25.13(2)(g). The judgment provides welcome exposition of when the security for costs regime under these respective tests is engaged, including guidance as to whether the two limbs of the non-residence condition (CPR 25.13(2)(a)) are cumulative or alternative. Written by Stuart Adams, partner, and Emily Bueno, associate at Mishcon de Reya LLP. or take a trial to read the full analysis.

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