The High Court granted the first default judgment in a claim relating to an alleged Bitcoin fraud perpetrated by fraudsters based abroad; the defendants are, an individual known as both Alan Bart and A. Philpott who is associated with FCA Automatic and Capital Usage and persons unknown involved with a crypto wallet at quogi.com related to Huobi Global Ltd., Capital Usage Ltd., Wade Press UK Ltd.
Giambrone & Partners LLP instructed Celso De Azevedo, of Enterprise Chambers to obtain the judgment related to a worldwide freezing order against the foreign fraudsters on behalf of our Italian client, this demonstrates that the English courts will act to protect foreign victims of fraud where there is sufficient connection to England and Wales. This is a significant development and brings the possibility of the recovery of funds lost to fraudulent investment schemes perpetrated by fraudsters based abroad.
Joanna Bailey, head of the banking and financial fraud department, commented “whilst we welcome the FCA’s recent initiative in introducing the new rules and regulations governing the promotion of crypto assets, the new regulations are limited and there is nothing in place to match the assistance available in respect of other forms of investment such as shares or Forex.” Joanna further pointed out “an investor will not be able to access the Financial Services Compensation Scheme or the Financial Ombudsman Service if they find that they have been defrauded. This is why this default judgment is so important as it provides a route to recovery of lost funds through the courts of England and Wales for foreign victims defrauded by foreign fraudsters based overseas.”
What is the Legal Status of Crypto Currency?
The rise of crypto currency has not been embraced with universal
legal standing. In some countries it is legal tender, in others it is banned. There are concerns about the lack of regulation. The Financial Conduct Authority (FCA) has implemented its new rules and regulations on how the promotion and marketing of crypto assets is permitted to be conducted a little over a week ago. However, there is still no financial protection or support if a novice investor is caught in a fraud.
What should you know before investing in Crypto currency?
Learn how blockchain technology works, and the fundamental concepts behind it. Establish which crypto currency you wish to trade in, they are not all the same.
Cryptocurrencies are highly volatile and values can change dramatically in a short period. Consider what you can afford to lose, whilst there is possibility of significant gains but also the potential of significant losses as well. Have a plan as to how much you intend to invest and how long you intend to make investments.
Before carrying any transaction verify the authenticity of schemes before investing. Do not fall investments that promise unrealistic returns, the “get rich quick” investments are highly unlikely to be safe.
The crypto industry is global and you should understand the tax implications in the jurisdictions you are investing in.
Take professional advice from a recognised expert if you are unsure about your investments.
Giambrone & Partners’ banking and financial fraud lawyers suggest that the default judgment obtained in this client’s matter has opened the door to the recovery of money lost to fraudulent investment schemes as it secures the financial resources of the wrongdoers preventing them emptying their bank accounts and placing their assets beyond reach.
Joanna Bailey, is a senior associate and heads our banking and financial fraud litigation department.
Joanna frequently leads the litigation against financial institutions involved in cryptocurrency trading disputes, as well as Forex investment issues and regulatory investigations and has some considerable success in retrieving our clients’ funds lost in fraud.
She has developed a range of strategies both to find the assets of the individuals perpetrating the fraudulent schemes and restore the funds to our clients. As well as recognising culpability in the organisations facilitating (but not associated with the fraud), by failing to undertake adequate due diligence.
Joanna led the first case in Europe where proceedings were served on Persons Unknown connected with two digital wallets over the blockchain by non-fungible token or ‘NFT’ in a cryptocurrency fraud. Following this ground-breaking case Joanna was named as Lawyer of the Week in the Financial Times.
Joanna is highly experienced in high-value out-of-court settlement negotiations and has in-depth knowledge of the Civil Procedure Rules as well as English common law.
Author: Joanna Bailey