TTL: Blockchain Engineers Owe Fiduciary and Tortious Duties

• The U.K. Court of Appeal heard Tulips Trading Ltd’s argument on Wednesday.
• TTL’s argument prompts the Court of Appeal for a two-hearing on the court’s previous decision.
• Lady Justice Andrews states that the questions TTL raised were significant.

The U.K. Court of Appeal heard Tupil Trading Limited (TTL), a Seychelles-based company’s argument on Wednesday. TTL argued that blockchain engineers owe fiduciary and tortious duties to those using their network. Notably, this case has the potential to define legal obligations owed by blockchain engineers to users and thereby pave way to regain users’ lost digital assets.

While presenting TTL’s side of the argument, John Wardell KC, a member of the UK Bar Association stated:

The issues raised are of fundamental importance to TTL itself, as it owns substantial assets that it can no longer access, as well as to the financial world generally.

Moreover, Wadell, while presenting his argument, stated that if there was fraudulent activity and if those who lost their asset had proof of ownership, and if the developer is paid handsomely to restore or prevent fraudsters from escaping with assets, then “can it really be said in those circumstances that its inarguable so as to be strikable that they can’t be required to reinstate access?” 

Upon hearing TTL’s argument, the U.K. Court of Appeal instigated a two-day hearing to scrutinize whether the court previously erred in its decision to dismiss the case due to the lack of jurisdiction.

In particular, TTL brought a lawsuit against sixteen developers and argued that these blockchain developers owed it tortious and fiduciary duties. And as a result, this would enable TTL to recover more than £1 billion in digital assets stolen in the 2021 hack.

However, thirteen of the defendants, who later on became fourteen, successfully challenged the High Court’s jurisdiction to hear the claims before Lady Justice Falk. The case was dismissed on the grounds that TTL had not established that there was a serious issue to be tried.

Moreover, when TTL was granted permission to approach the Court of Appeal before Lady Justice Andrews who recognized that TTL’s claims were of significant importance. Justice Andrews upheld the importance of the question raised by TTL.

With reference to which duties developers owe to digital asset owners, the Justice stated that “[it is] one of considerable importance and is rightly characterized as a matter of some complexity and difficulty.”