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Digital assets not sufficient for security of costs court tells bitcoin “inventor”

  • United Kingdom
  • Crypto assets
  • Financial services disputes and investigations



A man who claims to be “Satoshi Nakamoto”, the pseudonymous inventor of Bitcoin, has been told by the High Court in an ongoing claim worth c.£3.3bn that his company (as claimant) could not put up cryptocurrency as security for costs. 

Tulip Trading Limited, a holding company beneficially owned by Dr Craig Wright, is suing Bitcoin Association for BSV, the developers of Bitcoin SV, and 15 others1. The Claim arises from the deletion by hackers of Mr Wright’s private keys to c.£14m worth of Bitcoin SV.  Mr Wright claims that the Defendants owe tortious and/or fiduciary duties to re-write underlying software in order to enable him to access his Bitcoin SV without his private keys. In the alternative, he seeks the value of the Bitcoin SV from the Defendants.

The Defendants recently challenged the jurisdiction of the claim, which has been brought in England and Wales, and sought security for costs until their challenge was considered by the Court.

In considering the application for security for costs, Master Clark ruled that the Claimant should provide a total of £248,353 in security for the Defendants’ costs.  Master Clark also noted that security in the form of “digital assets”, such as Bitcoin, would not result in adequate protection for the Defendants.

The Court’s findings

The Claimant proposed that the security be provided in Bitcoin2, with an additional 10% to account for Bitcoin’s volatility.  The Claimant stated that it would transfer the Bitcoin to its solicitors, who would then provide written confirmation to the Court and the Defendants that they held the Bitcoin, together with an undertaking that it could be used to satisfy any adverse costs order made against the Claimant.  It was asserted by the Claimant, citing Infinity Distribution Limited (in administration) v Khan  Partnership LLP [2021]3 that payment via Bitcoin was the least onerous form of payment to the Claimant because it did not have a UK bank account and converting Bitcoin into fiat (i.e. a government issued currency the value of which is not determined by reference to or backed by a physical commodity or asset), would incur capital gains tax liabilities.

The Court, however, found that Bitcoin did not meet the criteria for payment of security set out in Monde Petroleum SA v Westernzagros Ltd4, specifically that Bitcoin “would not result in protection for the Defendants equal to a payment into Court”.  Master Clark considered that security in Bitcoin would “expose [the Defendants] to a risk to which they would not be exposed with the usual forms of security: namely a fall in value of Bitcoin”. 

The Claimant was also ordered to pay the costs of the application itself in the sum of £73,496.47.


The judgment will no doubt be of great interest and relevance to future disputes in the tech sector, particularly noting that the Court’s primary concern was Bitcoin’s volatility – not the principle of using non-fiat currencies as security for costs more generally. That leaves it to be seen what the Court’s approach would be if a Claimant were to offer as security for costs a stablecoin (being a non-fiat currency specifically designed to have a relatively stable price, typically through it being backed by a reserve asset, such as a government issued currency), and at what point there ceases to be a meaningful distinction between fiat and stablecoin, for these purposes.  In such circumstances, arguably the criteria set out in Monde Petroleum SA would be more likely to be met.

With an estimated 2.3 million UK adults now holding cryptoassets such as Bitcoin5, and increasing regulation and adoption from Governments, it is unlikely that Tulip Trading will be the last time a Court has to consider this issue.

  1. Tulip Trading Limited v Bitcoin Association For BSV & 15 others [2022] EWHC 2(CH)
  2. Specifically Bitcoin Satoshi Visioon or Bitcoin Core
  3. Infinity Distribution Limited (in administration) v Khan Partnership LLP [2021] EWCA CIV 565
  4. Monde Petroleum SA v Westernzagros Ltd [2015] 1 Lloyd's Rep. 330