Bitcoin Security: Should Developers Be Held Liable?
2nd March 2023
3PB Barristers’ (3 Paper Buildings) specialist commercial and chancery barrister Aaron Mayers (pictured here) discusses a recent dispute that was heard in the Court of Appeal regarding whether Bitcoin network developers have a fiduciary duty towards Bitcoin owners.
The case in question involves Tulip Trading Limited, which lost $4bn in Bitcoin when the private keys to its wallet disappeared in a hacking incident in 2021. Tulip brought claims against a number of Bitcoin network developers based on the allegation that a fiduciary duty exists between them, and that this should extend to Bitcoin network developers implementing the necessary software patch to restore Tulip’s assets.
Aaron explores the issues raised in relation to service of the claim through the High Court – which ruled that Tulip’s claim had insufficient merits to be heard – and the subsequent appearance in the Court of Appeal, which upheld the appeal and ruled that there was merit for the issue to be tried.
Aaron offers commentary on what the forthcoming trial could mean for the future of Bitcoin, offering the view that were this trial to go favourably for the Claimant, it could open “the possibility for Bitcoin owners to pursue claims against developers if they fail to act in the owners' best interests”, which “could have a significant impact on the liability of developers”.
Click here to read Aaron’s full analysis
Aaron Mayers is an experienced commercial and chancery barrister with a particular focus on developing litigation strategy and providing commercially viable advice in complex and high-value commercial and trusts disputes.
To contact or instruct Aaron, please contact his clerks Patrick Robson, Patrick Steptoe, and David Fielder or call 0207 583 8055.
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