In a pivotal decision, the High Court of Justice for England and Wales has officially recognized Tether’s USDT, the world’s largest stablecoin by market capitalization, as property under English law.
This ruling follows new UK legislation aimed at clarifying the legal status of cryptocurrencies, marking a significant precedent for digital asset holders in the country.
The case was brought by Fabrizio D’Aloia, who claims to have lost millions in a cryptocurrency scam involving USDT and USDC.
This ruling not only highlights the evolving legal treatment of digital assets but also strengthens the legal rights and protections for cryptocurrency investors in the UK.
What this new law means for digital asset holders
The court’s classification of USDT as property could reshape how cryptocurrencies are treated in legal disputes.
Deputy High Court Judge Richard Farnhill noted in his ruling that USDT can “constitute trust property” under English law, just like other forms of property.
This aligns with the UK government’s legislative efforts to establish a clearer legal framework for digital assets.
Recently, the UK government introduced a bill in Parliament to officially categorize cryptocurrencies as property, granting them specific legal rights and protections.
This move is expected to provide a stronger foundation for users and investors by defining how digital assets can be used, transferred, and traced in legal settings.
Victim of alleged scam claims £2.5 million loss
D’Aloia’s case stems from an alleged scam in which he lost £2.5 million ($3.3 million) in USDT and Circle’s USDC.
He claims an unidentified individual convinced him to transfer his crypto assets, which were later funneled through various blockchain wallets and withdrawn as fiat currency via exchanges such as Gate.io and Bitkub.
Despite his claims, the High Court ruled in favor of Bitkub, stating that the exchange “did not receive anything” from D’Aloia, thereby dismissing his claims against the platform.
While D’Aloia settled with several other defendants, including the crypto exchange Binance, the court’s ruling emphasized the necessity of proving the direct involvement of exchanges in fraudulent activities.
Similarly, D’Aloia’s case against Aux Cayes Fintech was also dismissed, leaving him with no recourse against these entities.
Strengthening UK’s crypto regulations
This ruling, combined with the UK government’s ongoing legislative push, could have far-reaching implications for the cryptocurrency market.
By officially recognizing digital assets as property, the UK is providing much-needed legal clarity, which could boost investor confidence and attract more institutional participation in the crypto space.
For investors, the decision offers a more defined legal framework for resolving disputes and pursuing claims.
This could help mitigate some of the risks associated with cryptocurrency investments, especially in cases of fraud or theft.
The ruling also sends a strong message to cryptocurrency exchanges operating in the UK.
Platforms like Bitkub and Binance, which were named in the case, will likely need to reassess their legal strategies and compliance frameworks to minimize potential liabilities.
As the legal landscape around digital assets evolves, exchanges must ensure that their operations are fully compliant with new regulations.
This includes implementing stronger security measures and improving transparency to protect user assets.
In conclusion, the UK High Court’s recognition of USDT as property represents a significant milestone for cryptocurrency regulation.
With clearer legal frameworks emerging, both investors and institutions can navigate the digital asset space with greater confidence.
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