England High Court Rules Tether’s USDT Stablecoin as Property Under English Law

• Tether’s USDT stablecoin is now classified as property under English law, confirming its traceability and trust property status.
• The UK government introduces new legislation to regulate cryptocurrencies as property, offering legal protection to holders.
• The High Court’s ruling in D’Aloia’s case reinforces that crypto exchanges like Bitkub can avoid liability in scam-related claims.

The High Court of Justice for England and Wales has declared Tether’s USDT stablecoin as property under English law. This decision came just a day after the U.K. government began legislating on the legal status of cryptocurrencies. The case was brought by Fabrizio D’Aloia, who claimed he fell victim to a cryptocurrency scam involving the misappropriation of digital assets.

Legal Status of Tether Confirmed

Deputy High Court Judge Richard Farnhill stated that USDT is subject to property rights, making it traceable and qualifying it as trust property. This clarification aligns with the ongoing regulatory efforts in the U.K. to classify cryptocurrencies as property, following the introduction of a new bill in Parliament. 

The bill, presented by the Law Commission, marks the government’s first step toward providing legal protection for crypto holders. Although Farnhill confirmed USDT’s status as property, he emphasized that cryptocurrencies are not considered physical possessions or actionable claims like money or debt.

D’Aloia’s Case Involving Crypto Exchanges

The court case, initiated by D’Aloia, primarily involved cryptocurrency exchange Bitkub and five other defendants, including two unidentified individuals and Binance. D’Aloia claimed that a scammer tricked him into transferring USDT and USDC valued at £2.5 million ($3.3 million). 

These funds were moved through various blockchain wallets and eventually converted to fiat currency via Bitkub and Gate.io. Notably, the case against Binance was already settled before the court ruling.

Judgment Favors Bitkub

Despite the legal victory confirming that USDT is considered property, the court ruled in favor of Bitkub. Farnhill concluded that Bitkub had no direct involvement, stating that the company did not receive anything from D’Aloia. 

Additionally, the claim against Aux Cayes Fintech, another crypto trading platform involved, was struck out by the court. The ruling, while significant in solidifying cryptocurrency’s status as property under English law, also highlights the complexities of fraud cases involving digital assets.