Bitcoin is 'property' and can therefore be subject of proprietary injunction

03 February 2020. Published by Christopher Whitehouse, Senior Associate

Following recent case law on the matter, the High Court has found that bitcoin can be 'property' and can therefore be the subject of a proprietary injunction.(1) In reaching its conclusion, the court adopted the detailed analysis of the issue set out in the UK Jurisdictional Task Force's November 2019 Legal Statement on Crypto-Assets and Smart Contracts, thereby providing a far more detailed judicial basis for the finding than found in previous cases. The bitcoins at the heart of this case were part of a ransom payment paid to a hacker who installed malware on a company's IT systems.


A hacker infiltrated and bypassed the firewall of an insured company and installed malware that encrypted its computer systems. The hacker left notes on the system directing the company to make a ransom payment in order to obtain the necessary tool to decrypt its systems.

The company notified its insurer, which engaged an incident response company to negotiate with the hacker regarding the ransom payment. In these discussions, a ransom payment worth the equivalent of $950,000 in bitcoin was agreed. Accordingly, 109.25 bitcoins were purchased by the insurer and transferred to an address provided by the hacker. The hacker provided the necessary decryption tool the following day.

The insurer engaged a specialist company to track the bitcoin payment and a substantial portion of the bitcoins were traced to a specific address linked to an exchange known as Bitfinex, which was operated by the two companies called iFINEX and BFXWW Inc.

The insurer issued proceedings and made various applications seeking a private hearing and various categories of relief, including a disclosure order against the Bitfinex companies and a proprietary injunction over the bitcoins that had been traced.

Application for private hearing

The insurer successfully applied for the hearing to be heard in private on the basis that publicity would defeat the object of the hearing,(2) as it would potentially tip off the hacker and enable it to dissipate the bitcoins. The judge also considered that there was a risk of further or revenge cyberattacks on both the insurer and the insured, as well as a risk of copycat attacks if their names were revealed. Further, the matter involved confidential information of which publicity would be damaging and it would be unjust for the respondents (the two Bitfinex companies) to be referred to in a public hearing.(3)

Disclosure application

The insurer applied for disclosure of the hacker's identity by the Bitfinex companies (both based in the British Virgin Islands) via a Norwich Pharmacal and/or Bankers Trust order – specifically, the know-your-customer information held by these companies.

The judge was referred to CMOC v Persons Unknown,(4) in which various disclosure orders against foreign banks had been granted following the misappropriation of funds after a business compromise fraud. However, the judge drew the claimant's counsel's attention to AB Bank Ltd v Abu Dhabi Commercial Bank PJSC,(5) which had not been considered in CMOC, which doubted that a Norwich Pharmacal order could have extra-territorial effect. In light of the potential difficulties with AB Bank, the claimant's counsel elected to adjourn the Bankers Trust and Norwich Pharmacal aspects of the order sought.

Proprietary injunction application

The insurer applied for a proprietary injunction over the bitcoins held in the account of one of the Bitfinex companies. Injunctions can be granted only over property (in this case, the bitcoins).
This issue has been considered in two recent High Court cases where the approach taken was to treat cryptocurrencies as property:

  • a worldwide freezing order was granted over a substantial quantity of bitcoin and ethereum (another virtual currency) – Vorotyntseva v Money-4 Limited;(6) and
  • an asset preservation order was granted over a sum of bitcoin – Robertson v Persons Unknown (unreported).

Neither of the above authorities considered the issue in depth. However, the matter was explored in detail in the UK Jurisdictional Task Force's Legal Statement on Crypto-Assets and Smart Contracts. The judge found the analysis in that publication to be compelling and adopted its conclusions.

The analysis identifies that under English law, property traditionally falls into two distinct categories:

  • 'things in possession' (ie, tangible assets); and
  • 'things in action' (eg, debt or contractual rights).

The latter category is hard to define as the term has become something of a catch-all for all property that does not fall into the first category. It is generally used to mean a right of property that can be enforced by court litigation, or action, such as a debt or contractual right; it is debatable whether a crypto-asset should be regarded as a thing in action but, by definition, it arguably should not (it is plainly not a thing in possession as such assets are not tangible).

However, following a detailed analysis of the relevant case law, the legal statement considered that other categories in addition to things in action and things in possession are capable of being property. Property could potentially extend to novel kinds of intangible asset that are not things in action, such as crypto-assets. Accordingly, the judge proceeded on the basis that bitcoin is property and granted the injunction.


This decision is good news for institutions attempting to recover misappropriated crypto-assets such as bitcoin. It provides the first substantive judicial reasoning regarding the basis on which bitcoin and, by extension, other cryptocurrencies and potentially other crypto-assets are property (and can therefore be the subject of proprietary injunctions). It does not resolve whether crypto-assets are technically things in action, which will be relevant in certain other contexts, such as insolvency situations.

The matter of the adjourned disclosure order is also of interest as the information obtained by such orders is often critical to enable the recovery of misappropriated funds. The AB Bank case cited dealt only with a Norwich Pharmacal application and not a Bankers Trust application, which was the principal focus in CMOC. Interestingly, in CMOC this appears to have been the result of a deliberate tactical decision taken precisely because of the difficulties with the Norwich Pharmacal pathway following AB Bank and the case law support for granting such orders under the Bankers Trust regime, such as Mackinnon v Donaldson.(7) Given the scale of this novel asset class, further developments are expected shortly.

For further information on this topic please contact Andy McGregor or Chris Whitehouse at RPC by telephone (+44 20 3060 6000) or email ( or The RPC website can be accessed at


(1) AA v Persons Unknown,Re Bitcoin [2019] EWHC 3556 (Comm).

(2) CPR 39.2(3)(a).

(3) CPR 39.2(3)(c) and (e).

(4) [2017] EWHC 3599 (Comm).

(5) [2016] EWHC 2082 (Comm).

(6) [2018] EWHC 2596 (CH).

(7) [1986] Ch 482. Further information is available here.

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