Chrysanthos Christoforou of Elias Neocleous discusses recent cases in which the UK courts have shown great flexibility and willingness to assist victims to trace and freeze their stolen crypto-assets
'Cryptos' are one of the hottest topics in the financial markets sector. At its simplest, cryptocurrency is any form of currency that exists digitally or virtually and uses cryptography (instead of the ordinary banking system) to secure transactions. Instead of being physical money carried around and exchanged in the real world, cryptocurrency payments exist purely as digital entries in an online database describing specific transactions.
It has been reported that cryptocurrency transactions exceeded $14 trillion in trading volume in 2021, which represents a 689% increase compared to 2020 trading volumes. The non-fungible token (NFT) market alone reached an estimated $22 billion last year. These figures and the rate of growth almost defy belief.
Nevertheless, there has been much debate about the level of security and safety of cryptocurrency transactions in recent years. The massive growth in cryptocurrency transactions in general has been accompanied by a significant growth in cryptocurrency-related fraud. In fact, the courts of various jurisdictions have been called upon to deal with urgent 'cryptocurrency fraud' cases. Cryptocurrency fraud comes in many forms, the most common being theft as a result of cyber hacking or the launching of fake cryptocurrency investment schemes.
In the UK, the Financial Conduct Authority (FCA) and the Police have warned of the prevalence of crypto scams and, in fact, there have been several instances in recent years where the English Courts have been called upon to freeze stolen crypto-assets.
The purpose of this article is to discuss very briefly some notable court cases involving cryptocurrency fraud, and to outline the available remedies and the role of the courts involved.
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