Crypto fraud victims could get new window on 'persons unknown'

Victims of cryptocurrency frauds perpetrated by unknown persons who could be anywhere in the world could find their routes to redress simplified under the latest proposals to reform the law covering digital assets. The Law Commission has proposed creating a new type of information order which could help fraud victims at the initial stage of an investigation. 

The proposal appears in a consultation paper on the application of private international law in the context of digital assets and electronic trade documents. 

According to the commission, crypto assets challenge established legal principles not because they have no physical existence but because the nature of distributed ledgers - the core technology of bitcoin - means that an act, event or object can exist 'nowhere and everywhere, at the same time'. This problem of 'omniterritoriality' makes it hard to resolve conflicts of jurisdictions and applicable laws.

A particular problem occurs in the first stages of a fraud claim, where all the victim has to go on is the address of an intermediary such as a crypto-token exchange. To obtain an information order from these parties it is necessary to launch substantive proceedings in England and Wales - without knowing who the final defendant will be, let alone whether they are in England and Wales. 

The commission's proposed solution is a new free-standing information order to help claimants obtain information about the perpetrators or the whereabouts of their tokens without having to go through existing civil procedure gateways.  

The commission also proposes modernising s72 of the Bills of Exchange Act 1882, a private international law provision that identifies the law applicable to particular contractual issues.  

'From assisting victims of crypto fraud to recognising how users interact with smart contracts and coding protocols, our provisional proposals respond to the socio-economic realities of the 21st century to ensure that the law of England and Wales remains at the cutting edge,' said David Hertzell, senior counsel for commercial and common law.

The deadline for responses is 8 September 2025.