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Bitcoin owner vs Bitcoin developers – the legal battle over the existence of fiduciary duty goes on.

The Court of Appeal of England and Wales in Tulip Trading Limited v. Wladimir van der Laan and ors [2023] EWCA Civ 83 allowed an appeal and opened the gates for a Bitcoin owner to pursue a claim for breach of fiduciary duty and duty of care against the developers of various blockchain-linked digital assets, including Bitcoin.


Tulip Trading Ltd (“Tulip”) owns digital assets on four blockchain networks (BSV, BTC, BCH and BCH ABC) but is unable to access them since the private keys have been lost in a hack - likely stolen.

Tulip advanced a claim of circa $4 billion against a number of Defendants, claiming that the Defendants, as developers of the digital currency networks in question, owe Tulip fiduciary and tortious duties to restore Tulip’s ability to access and use the digital assets.

High Court

The High Court (Falk J) in Tulip Trading Limited v Bitcoin Association for BSV [2022] EWHC 667 (Ch) concluded that it is not realistically arguable that the pleaded facts demonstrated a fiduciary relationship, as there were no circumstances which gave rise to a relationship of trust and confidence with an overarching obligation of loyalty between any of the Defendants and Tulip.

Therefore, the order permitting service out of the jurisdiction, and the service itself, was set aside.

Court of Appeal

The Court of Appeal unanimously reversed Falk J’s decision, finding that there is a serious issue to be tried as to the existence of the duties, but the time to decide whether such duties existed was once the facts of the case were established.

Lord Justice Birss recognised that if Tulip’s claim succeeded, it would involve a significant development of the common law on fiduciary duties. However, he explained, there is a “realistic argument” that the Defendant developers are fiduciaries since the:

  1. developers of a given network are a sufficiently well-defined group capable of being subject to fiduciary duties;

  2. developers of the network, objectively, have undertaken a role which involves making discretionary decisions and exercising power for and on behalf of other people, in relation to property owned by those other people; and

  3. property has been entrusted into the care of the developers.

The Court went further and stated that the gist of the fiduciary duty is one of a “single minded loyalty to the users of bitcoin software”, which encapsulates a duty

  1. not to act in their own self-interest;

  2. to act in positive ways in certain circumstances; and realistically

  3. to introduce code so that an owner’s bitcoin can be transferred to safety in circumstances where the private key has been lost (or stolen).

Lord Justice Birss stressed that the conclusion of the judgment “[…]is not that there is a fiduciary duty in law in the circumstances alleged by Tulip, only that the case advanced raises a serious issue to be tried” (para. 91).

In his final remark, he concluded that:

"The time to decide on the duty in this case is once the facts are established. As the judgment itself showed, to rule out Tulip’s case as unarguable would require one to assume facts in the defendant developers’ favour which are disputed and which cannot be resolved this way. If the decentralised governance of bitcoin really is a myth, then in my judgment there is much to be said for the submission that bitcoin developers, while acting as developers, owe fiduciary duties to the true owners of that property."


In view of the above judgment (and in the absence of any further appeal by the Defendants), Tulip will advance its claim on its merits. It is paramount to reiterate that:

  1. the present judgment did not conclude that the Defendants own a fiduciary duty to Tulip – it only concluded that the case raises a serious issue to be tried; and

  2. the quintessential questions, of the extent to which blockchain developers owe fiduciary and tortious duties to their users, will be decided once all the evidence and the facts have been crystalised.

The suggestion that a developer of open-source digital assets software has a fiduciary duty to the owners of bitcoin and thus should write code which fundamentally changes the design of the blockchain – in order to enable the digital assets to be transferred without the use of private key – is indeed novel and a long shot one. But if successful, it will reshape the current crypto market since (a) developers will be obligated to introduce code to help owners that have lost their private keys transfer and access their cryptocurrency; and if they do not (b) they will be in breach of their fiduciary duty and exposed to paying compensation.

We are looking forward to the final judgment in the Tulip saga to shed some light on this nascent legal area.

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The content of this article is valid as of the date of its first publication. It is only intended to provide a brief introduction to the particular subject matter. Detailed specialist advice should be taken prior to taking or refraining from taking any action as a result of the information contained in this article.


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