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In a landmark decision on September 12, the United Kingdom High Court has ruled that stablecoin {Tether} (USDT) is classified as property under English law. This is the first time a court in England has addressed the status of cryptocurrency through a full trial.
The ruling came as part of a case involving a fraud victim, Fabrizio D’Aloia, who had his cryptocurrency stolen, including Tether, which was subsequently moved through various crypto exchanges and mixers. The court addressed whether Tether, and by extension other cryptocurrencies, can be considered property under English law.
High Court Deputy Judge Richard Farnhill concluded that USDT does indeed attract property rights, noting that it represents a distinct form of property not reliant on traditional legal rights. According to Farnhill, Tether can be subject to tracing and can constitute trust property similarly to other types of property.
This ruling aligns with previous legal perspectives and reports. A 2019 judgment and a 2023 report by the England and Wales Law Commission both recognized cryptocurrencies as property, reinforcing the court's decision.
The judgment followed a UK government bill introduced to clarify that non-fungible tokens (NFTs), cryptocurrency, and carbon credits are considered "personal property" under existing property laws.
In the case, D’Aloia sought to prove that Thai crypto exchange Bitkub had benefited from his stolen Tether, totaling 400,000 USDT. However, the court found insufficient evidence to establish that Bitkub’s wallet had received D’Aloia’s USDT due to the use of crypto mixers that obscured the transaction trail.
Nicola McKinney, a partner at Quillon Law representing Bitkub, emphasized that while USDT can theoretically be traced in mixed pools, D’Aloia failed to demonstrate a direct link to Bitkub’s wallet. Matt Green of Lawrence Stephens advised that clear and precise evidence is crucial for legal claims involving cryptocurrencies, especially in cases involving complex mixing techniques.
D’Aloia had transferred $3.3 million (2.5 million British pounds) to the fraudsters. He also named other entities, including Binance and Polo Digital Assets, in his claims.
