UK court rules Tether is property in crypto fraud case

The United Kingdom High Court has made a landmark decision by ruling that Tether (CRYPTO:USDT) is classified as property under English law. 

This is the first ruling of its kind after a full trial concerning the legal status of cryptocurrency. 

The case was brought by fraud victim Fabrizio D’Aloia, whose stolen cryptocurrency, including USDT, was sold through various crypto exchanges after being processed through mixers. 

Deputy Judge Richard Farnhill stated in the September 12 ruling, “USDT attract property rights under English law,” confirming that Tether is recognised as a distinct form of property, not based on an underlying legal right, and can be subject to tracing and constitute trust property.

This decision aligns with a 2019 judgment that treated cryptocurrencies as property and follows the England and Wales Law Commission's 2023 report that defined digital assets as property. 

The ruling comes shortly after a UK government bill sought to clarify that non-fungible tokens (NFTs), cryptocurrencies, and carbon credits are considered "things" and "personal property" under the law.

However, D’Aloia’s attempt to hold Thai crypto exchange BitKub accountable for receiving 400,000 USDT, of which 46,291 USDT was traced from his stolen funds, was unsuccessful. 

The court found insufficient evidence to prove that any of D’Aloia’s USDT could be traced to BitKub’s wallet due to the use of crypto mixers. 

BitKub’s legal representative, Nicola McKinney, noted that while USDT can be identified in mixed pools, the plaintiff did not provide enough proof to support his claim.

Matt Green, head of blockchain and digital assets at Lawrence Stephens, emphasised the need for clear and well-articulated evidence in cases involving crypto asset tracing. 

An application for summary judgment against the involved parties will be considered at a future date.

At the time of reporting, the Tether (USDT) price was $0.9995.