UK court rules Tether is property in first English law post-trial crypto ruling

The United Kingdom High Court has ruled that stablecoin Tether is property — the first-ever ruling under English law on the treatment and status of cryptocurrency after a full trial.

The judge added that USDT was “rather a distinct form of property not premised on an underlying legal right” and can be the “subject of tracing and can constitute trust property in the same way as other property.”

He noted a “strong line of authority” that cryptocurrencies are property from a 2019 judgment in the same court that wasn’t made at trial. It was also consistent with the England and Wales Law Commission’s position in a 2023 digital assets report marking them as property.

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Quillon Law partner Nicola McKinney, who represented Bitkub, explained to Cointelegraph that the judge concluded USDT could, in principle, be identified in mixed pools, but D’Aloia “could not evidence on the balance of probabilities that any of his USDT could be traced to the relevant Bitkub wallet.”

Farnhill said there was no “defective transaction” between D’Aloia and Bitkub to “undo.”

“The legal link connecting Mr D’Aloia with Bitkub is simply missing from his claim. For this reason, too, he cannot succeed in his breach of trust claim.”

Matt Green, the blockchain and digital assets head at law firm Lawrence Stephens, told Cointelegraph the case is a lesson for analytic report providers to ensure evidence is clearly articulated by courts.

“It is vital that legal teams understand the fact patterns carefully in order to advance proprietary claims and ensure mixing issues are dealt with accordingly,” he said.

The court heard that D’Aloia transferred a total of 2.5 million British pounds ($3.3 million) to the fraudsters across several transactions.

D’Aloia also named Binance, Polo Digital Assets, Gate Technology Corp, Aux Cayes Fintech and the scammers, who are named as “persons unknown.”

An application for summary judgment against the parties is to be determined, and consequential orders will be heard at a later date.