Tulip Trading and Bitcoin Ownership: Lessons for Cryptocurrency Litigation

Cryptocurrency disputes can involve very different questions from conventional asset-tracing matters.

A public blockchain may show that Bitcoin remains associated with a particular address, but the transaction record does not necessarily establish who legally owns the assets, who controls the private keys or whether another party can be required to restore access.

These issues were central to litigation brought by Tulip Trading Limited against a group of Bitcoin software developers.

Tulip Trading claimed ownership of a substantial quantity of digital assets but said it could no longer access them after private-key information was allegedly removed during a hack. The company argued that the developers responsible for several Bitcoin networks owed legal duties requiring them to help restore control of the assets.

The claim raised novel questions about software development, digital property and private-key access. It did not ultimately proceed to the anticipated trial because the proceedings were discontinued in April 2024.

The case nevertheless provides useful lessons for parties involved in cryptocurrency litigation, particularly where technical control, documentary evidence and legal ownership do not align neatly.

What Was the Tulip Trading Claim?

Tulip Trading Limited is a company incorporated in the Seychelles and associated with Dr Craig Wright.

The company claimed that it owned digital assets held at addresses on several blockchain networks, including Bitcoin Core, Bitcoin Cash and Bitcoin Satoshi Vision.

Tulip Trading said that computers at Dr Wright’s home office in Surrey had been hacked and that information required to access the relevant private keys had been removed.

Without the private keys, the company said it could not transfer or use the assets.

Tulip Trading brought proceedings against developers said to control or contribute to the relevant blockchain software. It claimed that the developers owed fiduciary or tortious duties requiring them to assist the company in regaining access.

The proposed remedy involved changes to the network software that would enable Tulip Trading to control the disputed assets without the original private keys.

The developers disputed the claim and the existence of the alleged duties.

Why Private Keys Matter

A private key is cryptographic information used to authorise transactions from a cryptocurrency wallet.

Anyone with effective control of the relevant private key may generally be able to transfer the associated cryptocurrency. Losing that information can therefore make the assets practically inaccessible.

However, possession of a private key and legal ownership are not always the same thing.

A person may control a wallet while holding assets for someone else. A business may claim beneficial ownership while an employee, director or service provider controls the technical access. A private key may also be stolen, copied or shared.

Cryptocurrency disputes may therefore require separate consideration of:

• The blockchain transaction history
• The relevant wallet addresses
• The person with technical control
• The circumstances in which the assets were acquired
• Contracts or trust arrangements
• Company ownership
• Communications between the parties
• The source of the funds
• The legal basis of the ownership claim

The blockchain may show where the assets are recorded and how they moved. It does not automatically resolve every dispute concerning legal entitlement.

What Duties Were Alleged Against the Developers?

Tulip Trading’s case was unusual because it did not simply seek information from an exchange or pursue an alleged fraudster.

Instead, it argued that the developers of the relevant blockchain networks owed duties to cryptocurrency owners.

Tulip Trading maintained that the developers should take steps to allow the company to regain control of the assets. This could have required amendments to the network software or another technical mechanism that bypassed the missing private keys.

At first instance, the High Court concluded that Tulip Trading had not established a serious issue to be tried concerning the alleged duties and set aside permission to serve the claim outside the jurisdiction.

The Court of Appeal later allowed the claim to proceed beyond that jurisdictional stage. It concluded that there was a sufficiently arguable case for the alleged developer duties to be considered at trial.

The Court of Appeal was not deciding that the duties existed or that Tulip Trading owned the assets.

That distinction is important.

An early procedural decision allowing a claim to continue is not a final judgment on ownership, liability or the authenticity of the supporting evidence.

Why Documentary Authenticity Became Important

A cryptocurrency ownership claim may depend on much more than blockchain records.

The claimant may need to establish:

• How and when the cryptocurrency was acquired
• Which individual or company paid for it
• Whether the assets were transferred between related parties
• Who controlled the relevant wallets
• Whether private keys were generated, stored or shared
• Whether the supporting agreements and communications are genuine
• Whether later conduct is consistent with the claimed ownership

Documents may include contracts, company records, wallet information, emails, messages, tax records, accounting material and technical logs.

Questions about authenticity can become central where records are incomplete, inconsistent or challenged by another party.

Subsequent litigation involving Dr Wright resulted in findings that documents relied upon in wider Bitcoin-related proceedings had been forged. Later court proceedings also recorded concerns about material deployed in the Tulip Trading claim.

Tulip Trading’s ownership allegations were not finally determined through the planned trial because the proceedings were discontinued.

The correct approach is therefore to distinguish carefully between:

• A party’s allegation
• Documentary evidence supporting that allegation
• An opposing party’s challenge
• A procedural court ruling
• A final judicial finding

What Happened to the Proceedings?

Tulip Trading’s claim was discontinued in April 2024.

A later High Court judgment recorded that the company had sought orders requiring Bitcoin developers to amend the underlying code so that it could regain access to the disputed cryptocurrency. The judgment also recorded that Dr Wright caused the proceedings to be discontinued.

The anticipated trial therefore did not take place.

The Court of Appeal judgment remains legally significant because it considered whether the alleged duties were sufficiently arguable for the claim to proceed. It did not establish that blockchain developers generally owe cryptocurrency owners a duty to restore access to lost assets.

Blockchain Evidence Does Not Resolve Every Ownership Dispute

Blockchain records can provide strong evidence of transaction activity.

They may show:

• When cryptocurrency entered a wallet
• Where it came from
• Whether it was later transferred
• Which addresses interacted
• The amounts involved
• Whether funds moved through an exchange or service

They do not ordinarily show:

• The legal name of the wallet controller
• The contractual basis on which assets were held
• Whether the controller acted for a company or another person
• Whether a transfer was authorised
• Who ultimately holds beneficial ownership
• Whether an off-chain agreement changes the legal position

This means transaction analysis should often be considered alongside corporate, documentary and witness evidence.

A wallet may remain visible on the blockchain while the parties continue to dispute who owns it or who should be entitled to control the assets.

How Asset Tracing May Support Cryptocurrency Litigation

Asset tracing can help establish the wider financial and corporate context surrounding a cryptocurrency dispute.

Depending on the matter, research may identify:

• Companies connected to the parties
• Historic directorships and shareholdings
• Property or business interests
• Relationships between people, companies and wallet activity
• Relevant exchanges or service providers
• Jurisdictions requiring further enquiries
• Conventional assets connected to cryptocurrency transactions
• Ownership changes requiring closer examination

The process does not provide unrestricted access to bank accounts, private investment holdings or confidential exchange records.

It may instead identify registered interests, transaction paths and indicators that legal advisers can consider when deciding whether further disclosure or specialist evidence is required.

For a broader explanation of the process and its limitations, read What Is Asset Tracing?.

How Investigators May Support Cryptocurrency Litigation

Investigators may assist solicitors and clients by organising and examining information relevant to a digital-asset dispute.

Depending on the matter, this may include:

• Mapping cryptocurrency transactions
• Identifying exchange or service-provider touchpoints
• Reviewing companies and connected parties
• Examining historic ownership and control
• Checking addresses, dates and corporate records
• Reviewing communications and document metadata
• Identifying inconsistencies requiring further examination
• Preserving publicly available evidence
• Establishing which jurisdictions may be relevant

The role is not to decide legal ownership.

Investigators may identify findings and evidential gaps. Solicitors assess the legal implications, disclosure options and procedural requirements. Technical experts may be required to address private-key management, network architecture or software development.

The court ultimately determines disputed questions of fact and law.

Investigators, Experts and Solicitors Have Different Roles

A cryptocurrency dispute may require several professional disciplines.

Investigators may examine transactions, entities, relationships and the provenance of information.

Blockchain analysts may map activity across supported networks and identify relevant services or transaction patterns.

Digital-forensic experts may examine devices, files, access records and document metadata where lawfully available.

Solicitors and counsel advise on ownership claims, disclosure, jurisdiction, remedies and the use of evidence.

Courts determine legal entitlement, liability, admissibility and the orders that should be made.

No private investigator can guarantee that a document will be admitted, ownership will be established or access to cryptocurrency will be restored.

Clearly sourced reporting can nevertheless help legal teams identify the questions requiring further evidence or formal disclosure.

Lessons from the Tulip Trading Case

The Tulip Trading proceedings demonstrate that cryptocurrency litigation may extend well beyond following transactions on a blockchain.

Important lessons include:

• Technical control and legal ownership are different issues
• Loss of a private key does not itself establish ownership
• Blockchain records may need to be considered alongside off-chain evidence
• Novel claims against software developers face complex legal questions
• Procedural rulings should not be presented as final findings
• Documentary provenance and authenticity can be critical
• Investigators should distinguish verified facts from allegations
• A proposed technical remedy may create legal and governance issues for other network participants

The case also demonstrates the importance of keeping time-sensitive legal articles updated. Proceedings may be discontinued, settled or overtaken by later judgments.

Investigative Support for Cryptocurrency Disputes

Conflict International supports law firms, businesses and private clients involved in complex cryptocurrency and digital-asset disputes.

Our work may include:

• Blockchain transaction analysis
• Corporate and connected-party research
• Documentary and source review
• Identification of relevant exchanges and service providers
• International ownership enquiries
• Conventional asset research where relevant
• Clearly sourced reporting for legal and professional review

Our Asset Tracing Services may assist where a dispute requires research into property, companies, cryptocurrency transactions or connected financial interests.

We distinguish confirmed findings from allegations, possible connections and matters requiring formal disclosure or expert evidence.

We do not determine legal ownership, compel software changes or guarantee that access to digital assets can be restored.

To discuss investigative support for a cryptocurrency dispute, contact Conflict International with the available transaction, corporate and documentary information.