Investment fraud has become the scourge of the modern world with multiple regulators and other agencies pointing to the inextricable rise of financial fraud, which is now the leading crime in the United Kingdom. Fraudsters are adaptable and agile and quick to recognise a potential vehicle for fraud and therefore cryptocurrency frauds have risen to £146 million ($200 million) in the UK in 2021, according to the City of London Police.

Giambrone & Partners banking and financial fraud litigation lawyers point out that cryptocurrency fraud is a global activity and when the perpetrators of such a fraud are identified a well-managed robust, rapid response is essential.  In a sector with scant regulation or accountability, immediate action is imperative.

The ongoing implications of Giambrone & Partners new “first” in the courts of England & Wales, relating to the very recent success in the case of D’Aloia v. (1) Persons Unknown (2) Binance Holdings Limited & Others where service of documents was delivered as an non-fungible token (“NFT”) through blockchain, means that, not only has the court moved to embrace new advances in technological innovation, bringing modernisation to the courts by the use of this method of service which translates into real-world activity.  Its immutable nature will prove to be a highly desirable quality in a number of types of dispute.

Joanna Bailey, who heads the banking and financial fraud litigation department commented “the new procedure establishes a precedent, in that it recognised the five cryptocurrency exchanges holding our client’s cryptocurrency as constructive trustees” Joanna further remarked “we have now been provided with a way to hold a third party accountable for ensuring that cryptocurrency stolen in a case of suspected fraud cannot be spirited away by the fraudsters. One of the major issues facing victims of cryptocurrency fraud is that the perpetrators would hide both themselves and the misappropriated funds.”

The court’s forward-thinking decision will open the door to more frequent use of modern technology in the fight against cybercrime with all its multiple facets.  Giambrone & Partners is well-positioned to assist individuals and organisations who have fallen victim to cyber fraud, having developed proven techniques for securing evidence and strategies to assist in the successful recovery of lost funds.

As the perpetrators of cryptocurrency fraud attempt to remain hidden our lawyers believe that it may be that the organisations surrounding the fraud are more likely to be held to account in the future, from the celebrities and influencers that promote frauds, (albeit often unwittingly), to blockchain networks and social media platforms where romance frauds and pump and dump frauds are frequently found.  Whilst these mediums are not directly involved with the fraud and do not have any part of the deception they do not protect the users of their facilities, often using what to some appear to be spurious arguments to defend their lack of action, suggesting they were unaware a fraud was being executed.

Holding the facilitators of fraud to account would spur them to introduce tighter controls on those who wished to access their platforms, as well as ensuring that the celebrities and their agents would undertake due diligence on the investment brokers and schemes that they elect to promote.


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