Investors’ Rights in (Crypto) Custodial Holdings: Ruscoe v Cryptopia Ltd (in Liquidation)
| Published date | 01 January 2021 |
| Author | Matteo Solinas |
| Date | 01 January 2021 |
| DOI | http://doi.org/10.1111/1468-2230.12588 |
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Modern Law Review
DOI:10.1111/1468-2230.12588
CASES
Investors’ Rights in (Crypto) Custodial Holdings: Ruscoe
vCryptopia Ltd (in Liquidation)
Matteo Solinas∗
Ruscoe vCryptopia Ltd (in Liquidation) is a landmark decision of the New Zealand High Court
that considers for the rst time in a comprehensive way whether cryptocurrencies are property
at common law and to what extent account holders’(interests in) cryptocur rencies areprotected
from the claims of the insolvent crypto-exchange’s creditors. The ruling relies on a body of case
law from various common law jurisdictions and, to a signicant extent,on the ndings of the
UK Jurisdiction Taskforce Legal Statement on Cryptoassets and Smart Contracts. In tackling
complex areas of legal uncertainty,it provides an authoritative conceptual benchmark for future
court decisions and normative initiatives.
INTRODUCTION
Ruscoe vCryptopia Ltd (in Liquidation)1oers a good illustration of the exist-
ing gulf between the techno-utopian perception of the cryptocurrency world
and the reality of market practice.From its orig in in the aftermath of the 2008
nancial crisis,2bitcoin’s best selling point was the prospect of a ‘trustless’alter-
native to online payment systems that could allow users to deal directly with
each other without oversight from any central monetary authority.3The fun-
damental underlying idea involved a peer-to-peer computer network made up
of its users’ machines regulated by a public ledger that everyone could inspect,
but which no single user could control.
Little more than a decade on,the project of a currency without a central bank
has fallen short of its initial intended purpose.4Lack of adoption and signicant
∗Senior Lecturer in Commercial Law,Victoria University of Wellington,Faculty of Law.I am grateful
to David McLauchlan, Peter Watts,Thomas White and an anonymous reviewer for helpful comments
and suggestions on an earlier draft. The usual disclaimer applies.Unless otherwise stated, all URLs
were last accessed 4 August 2020.
1Ruscoe vCryptopia Ltd (in Liquidation) [2020] NZHC 728.
2 S. Nakamoto, ‘Bitcoin: A Peer-To-Peer Electronic Cash System’ White Paper, 2008 at https:
//bitcoin.org/bitcoin.pdf .
3 K. Werbach,The Blockchain and the New Architecture of Trust (Cambridge, MA: MIT Press, 2018)
53-71 and N.Dodd, ‘The Social Life of Bitcoin’ (2018) 35 Theory Culture and Society 35,41-47.
4 E. Schuster, ‘Cloud Crypto Land’ (2020) MLR forthcoming; K. Low and E. Mik, ‘Pause the
Blockchain Legal Revolution (2020) 69 ICLQ 135 and M. Wolf, ‘The libertarian fantasies of
cryptocurrencies’ Financial Times 13 February 2019 at https://www.ft.com/content/eeeacd7c-
2e0e-11e9-ba00- 0251022932c8.
© 2020 The Author.The Modern Law Review © 2020 The Modern Law Review Limited.(2021) 84(1) MLR 155–167
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