Report: Court Ruling to Return Mistakenly Sent Cryptocurrency Could Set Precedent

December 13, 2018
51 Views

A blog post from the University of Oxford Faculty of Law highlights the potential impact of a recent Canadian court ruling on lost or stolen crypto claims.

A Dec. 12 Business Law Blog post from the University of Oxford Faculty of Law notes possible repercussions for lost and stolen crypto claims following a case in a Canadian trial court earlier this year.

In the post, SAFE Frankfurt researcher Grygoriy Pustovit notes the case of Copytrack Pte Ltd v Wall. The superior trial court of British Columbia ruled that Ethereum (ETH) tokens, which were mistakenly sent by the plaintiff, Singapore blockchain startup Copytrack, to the defendant, Brian Wall, must be returned to Copytrack.

The defendant mistakenly received 530 Ethereum coins from Copytrack instead of 530 Copytrack (CPY) tokens that he was supposed to receive after participating in Copytrack’s initial coin offering (ICO). The Ethereum amounted to 495,000 Canadian dollars ($370,482), while the value of CPY tokens he intended to purchase was 780 Canadian dollars ($583) at the time.

“This precedent may have major repercussions for the enforcement of claims regarding lost or stolen cryptocurrency,” Pustovit claims, as the ruling allows the plaintiff to trace and recover tokens “in whatsoever hands those Ether Tokens may currently be held.”

As professional services for tracing digital assets develop, the rightful owners of certain assets could trace them on a public ledger and ostensibly recover tokens once they appear in an exchange’s wallet. Pustovit states that blockchains are not only governed by their code, but by the laws of concerned jurisdictions as well.

While noting that cross-border enforcement of varying national laws and regulations could prove difficult, the blog says that crypto businesses will likely comply with judgements in jurisdictions wherein they have strategic interests.

Pustovit also states that the Canadian court “missed the opportunity” to define the legal character of cryptocurrencies because it “could not be handled through summary judgment.” Since the defendant was deceased, “there would be no practical utility in sending this matter to trial.” The court therefore ruled the Ethereum tokens to simply be the property of the plaintiff and that they should be returned. Claims in conversion and detinue were left unsettled.

While the legal status of cryptocurrencies in case law remains hazy, “there is an increasing number of decisions recognizing that other intangible assets, e.g. funds, shares and mineral interests, may be subject to claims in conversion and detinue.”

Canada is reportedly one of the most crypto-friendly countries, with its favorable regulation of the industry, and low energy costs for crypto mining. In the summer of 2018, the Canadian government issued an official draft regulation for crypto exchanges and payment operators.

Additional reporting by Helen Partz

You may be interested

Bitcoin Falls Under $5,300 Again as Top Altcoins See Losses
Altcoin
37 views
Altcoin
37 views

Bitcoin Falls Under $5,300 Again as Top Altcoins See Losses

btcethereumadmin - April 21, 2019

Most of the top 20 cryptocurrencies are reporting slight to moderate losses on the day as bitcoin has fallen under…

Man Accused of Stealing Over $9 Million Worth of Dash Indicted in Israel
Bitcoin
39 views
Bitcoin
39 views

Man Accused of Stealing Over $9 Million Worth of Dash Indicted in Israel

btcethereumadmin - April 21, 2019

An indictment has been filed against Afek Zard in Israel over the alleged theft of 74.990.74 Dash from his roommate.…

Blockchain Patent Granted to Cybersecurity Company Owned by U.S. Defense Contractor
Blockchain
26 views
Blockchain
26 views

Blockchain Patent Granted to Cybersecurity Company Owned by U.S. Defense Contractor

btcethereumadmin - April 21, 2019

Texas-based cybersecurity company Forcepoint has been awarded a blockchain-related patent. Documents published by the United States Patent and Trademark Office…

Leave a Comment

Your email address will not be published.