2021 was a blockbuster year for cryptocurrency, aided largely by the Covid-19 pandemic, which saw markets and trading vastly increase. As a result of such growth, cryptocurrency asset tracing is no longer a niche legal sphere. It is one increasingly visible within the English Courts. In January 2022, the Master of the Rolls Sir Geoffrey Vos emphasised the need for all commercial and dispute resolution lawyers to understand blockchains, smart legal contracts and cryptoassets.
Non-fungible tokens (NFTs – digital assets which are not traded on exchanges, but instead are tokens which represent the ownership of a digital file (for example, a photo or digital art)) have exploded onto the digital asset ‘scene’ over the last 18 months or so. They are generally (but not always) built on the Ethereum blockchain. NFTs are bought and sold using cryptocurrency, but not traded on exchanges. Instead, they are purchased through specialist third party auction sites or sold/transferred privately.
The speed of mass NFT adoption has created significant opportunity (in the wake of the increase in value of NFTs, and also allowing content creators to monetise their services by tokenising art and music) but also exposed potential for the system to be exploited.
We are now starting to see a variety of cryptocurrency related frauds appearing before the English Court. Following the decision in AA v Persons Unknown  EWHC 3556 (Comm) (where an insurer was granted a proprietary injunction as part of its strategy to recover a ransomware payment which had been negotiated and paid in Bitcoin) the English Court has dealt with several cases relating to cryptocurrency.