Tulip Trading Case Moves Forward: Would Give Redress for Lost or Stolen Digital Assets
A U.K. High Court decision to throw out a case that would have determined whether blockchain developers owe legal duties to their users requiring the return of access to lost or stolen digital assets itself has been thrown out. The Court of Appeal has unanimously determined this week that the question is set to get the benefit of a full trial.
All three Appeal judges found that the High Court judges had erred in their previous ruling.
From the ruling:
“…there is, it seems to me, a realistic argument along the following lines. The developers of a given network are a sufficiently well defined group to be capable of being subject to fiduciary duties. Viewed objectively the developers have undertaken a role which involves making discretionary decisions and exercising power for and on behalf of other people, in relation to property owned by those other people. That property has been entrusted into the care of the developers. The developers therefore are fiduciaries. The essence of that duty is single minded loyalty to the users of bitcoin software. The content of the duties includes a duty not to act in their own self interest and also involves a duty to act in positive ways in certain circumstances. It may also, realistically, include a duty to act to introduce code so that an owner’s bitcoin can be transferred to safety in the circumstances alleged by Tulip.”
It continues: “to rule out Tulip’s case as unarguable would require one to assume facts in the defendant developers’ favour which are disputed and which cannot be resolved this way. If the decentralised governance of bitcoin really is a myth, then in my judgment there is much to be said for the submission that bitcoin developers, while acting as developers, owe fiduciary duties to the true owners of that property.”
Tulip Trading’s case will proceed to trial as a result of this ruling.
Jordan Atkins of CoinGeek explains the potential consequences (in this case positive):
"If successful, Tulip Trading will have demonstrated that there is hope for the many who have had their digital assets lost or stolen and have assumed (wrongly) that there is no avenue for redress."
Bitcoin creator Dr. Craig Wright heads up Tulip Trading.
“We are delighted that the judges have granted permission for TTL to pursue its claim for breach of fiduciary duties and/or duty of care against the developers of blockchain linked digital assets including Bitcoin. The court has clearly understood that the interests and actions of individuals using a cloak of decentralisation can control a global financial system. This will ensure that Bitcoin owners and that holders of Bitcoin can properly safeguard and recover control over their digital assets.”
- Aaron Goldstein, Gambling911.com
