The Court of Appeal has held that there is a realistic argument that Bitcoin developers, while acting as developers, owe fiduciary duties to the true owners of that property, which could include taking active steps to introduce code so that an individual owner’s Bitcoin can be transferred to safety: Tulip Trading Limited v Wladimir van der Laan and ors [2023] EWCA Civ 83.
While the effect of the judgment is not to decide whether such a duty exists, in general or in this specific instance, it means that the question will need to be determined at trial, once the relevant facts have been established.
Although the central debate in the present case relates to the true nature of decentralisation in the context of the blockchain, the trial will present the court with a novel scenario in which to examine the existence of fiduciary duties. If a duty is found to exist, it would in the words of Lord Justice Birss “involve a significant development of the common law on fiduciary duties”.
The outcome of this case may, therefore, have general implications for when a fiduciary duty will be found to be owed, beyond the specific repercussions for software developers and controllers. We will be following the proceedings with a focus on the potential impact for financial institutions.
For more information on the decision, please see out Litigation Notes blog.
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