Mrs Justice Bacon has struck out a claim against the cryptocurrency exchange OKX in the much-discussed crypto case of D’Aloia v Persons Unknown & Ors, and last week permission to appeal was refused. An earlier decision of Mr Justice Trower on interim relief at a without notice hearing in D’Aloia v Persons Unknown & Ors [2022] EWHC 1723 (Ch) attracted considerable attention, partly because the claimant sought to impose personal liability as a constructive trustee on certain crypto exchanges who had allegedly received traceable proceeds of a crypto authorised-push-payment fraud, rather than just seeking to freeze and recover such traceable assets as were still held in the alleged fraudster’s account on those exchanges. In a contested hearing in the similar case of Piroozzadeh v Persons Unknown & Ors [2023] EWHC 1024 (Ch), Mr Justice Trower clarified that his earlier interim relief decision in D’Aloia is not authority that crypto exchanges were constructive trustees for third party victims of fraud, and he warned the claimant in Piroozzadeh that “he can garner no support for thinking that his claim” that crypto exchanges are personally liable to him “has any real substance” [42]. Subsequently, Mr Piroozzadeh discontinued his claim against OKX.

In D’Aloia, the claimant’s blockchain analysis expert, who had originally submitted a report in support of the without notice interim relief granted by Mr Justice Trower, changed his mind and accepted OKX’s position that the blockchain wallet address of OKX which he had previously said contained traceable crypto did not in fact do so. However he then asserted that other wallet addresses of OKX did contain traceable crypto. It was common ground that trial, listed for June 2024, should not be adjourned. In light of that, Mrs Justice Bacon struck out Mr D’Aloia’s claim against OKX since it would have required OKX to go back to square one and revisit every step in the evidence process from the start. (The trial continues in respect of the other exchange defendants in respect of such of the original expert evidence as is still supported by the expert.)

Nik Yeo and Laurentia de Bruyn, along with Judy Fu (3 Verulam Buildings), acted for OKX in D’Aloia, instructed by Ajay Malhotra, Philip Lis, John Mathew and Rafael Lawrence of Herbert Smith Freehills. Nik and Laurentia also acted for OKX in Piroozzadeh. Mrs Justice Bacon’s decision in D’Aloia can be found here, and Mr Justice Trower’s decision in Piroozzadeh can be found here.