The High Court has held that cryptoasset systems and software developers did not owe a duty to cryptoasset owners to permit or enable access to the assets where the owners had lost control over the assets following a hack: Tulip Trading Limited v Bitcoin Association for BSV [2022] EWHC 667 (Ch).
This is an important judgment for financial institutions who offer cryptoasset custody services, or otherwise deal with cryptoassets, and is the latest in a series of significant rulings from the English courts in relation to this asset class.
The decision suggests that an owner of cryptoassets has no recourse against the developers of the relevant cryptoasset systems if they lose control of their cryptoassets, either accidentally or due to an event such as a hacking incident. It does not, however, altogether close off arguments that the developers or controllers of cryptoasset systems might owe fiduciary duties or a tortious duty of care in other circumstances, for example where they have introduced a bug by means of a software update or otherwise created a risk to users.
For a more detailed discussion of the decision, please see our litigation blog post.
For further information, please contact:
Natasha Johnson, Partner, Herbert Smith Freehills
natasha.johnson@hsf.com
