The High Court of England considers USDT as real estate, reinforcing the legal recognition of cryptocurrencies
In a groundbreaking ruling, the High Court of England and Wales has declared that USDT, the stablecoin issued by Tether, can be considered as real estate (property) under English law. This judgment comes at a time when the British government is seeking to clarify the legal status of cryptocurrencies, highlighting a growing recognition of digital assets within property law.
An asset subject to tracking and trust law
USDT can be traced and can constitute a trust property, just like any other asset.
In his conclusions, Deputy Judge Richard Farnhill stated that USDT attracts property rights under English law. This means that this stablecoin can be traced and can constitute a trust property, much like other forms of property such as shares or physical assets. This decision reinforces the notion that cryptocurrencies, although not physical objects or debts, should be treated with the same rights as traditional assets.
This statement included in the court documents paves the way for clearer management of digital assets in litigation cases, particularly in cases of fraud or misappropriation of funds.
Case context
The case that led to this decision was brought before the court by Fabrizio D’Aloia, who claims to have been a victim of a cryptocurrency scam. D’Aloia alleges that he was encouraged to transfer approximately £2.5 million (just over €3 million) in USDT and USDC to an unidentified scammer. The scammer then allegedly transferred these funds through various blockchain wallets before withdrawing them into fiat currency using the Bitkub and Gate.io exchange platforms.
The case involved several exchange platforms, including Binance, which has already settled its disputes with D’Aloia, and Bitkub, named as one of the seven defendants. However, Judge Farnhill ultimately ruled in favor of Bitkub, concluding that the company did not receive funds directly from D’Aloia, leading to the dismissal of his complaint against this platform.
British legislation and the evolution of the status of cryptocurrencies
This decision comes in the context of legislative reforms in the United Kingdom, where the government has recently introduced a bill to treat cryptocurrencies as assets. This bill, first presented to Parliament and drafted by the Law Commission, seeks to clarify the nature of cryptocurrencies under British law. Although these assets are neither ‘things in possession’ (like money or cars) nor ‘things in action’ (like debts or shares), the bill and the High Court’s decision assert that they can nevertheless be considered as assets with specific rights.
This legislative development aims to provide a more coherent legal framework for cases involving cryptocurrencies, a growing necessity as the number of disputes involving these assets continues to rise.
Conclusion and implications
The recognition of USDT as property opens up a new path for cryptocurrency regulation in the UK, both in terms of investor protection and dispute management. This decision strengthens the legitimacy of digital assets within traditional legal systems and could encourage other jurisdictions to follow the British example by adopting a similar approach to treating cryptocurrencies as assets.
