Clarification On Specific Performance And Damages Assessment In Cryptocurrency Loan Dispute

In Southgate v Graham [2024] EWHC 1692 (Ch), the High Court considered an appeal concerning a loan agreement involving cryptocurrency. The key issues were

(i) whether the trial judge was correct in refusing to grant specific performance for the return of the Ethereum tokens;

(ii) the appropriate valuation date for assessing damages.

The High Court rejected the first ground of appeal but allowed the appeal on the second ground. In refusing to grant specific performance, the High Court held that there is nothing special about cryptocurrency to suggest that a failure to return it under a loan agreement cannot be adequately compensated by damages.

Background

In June 2018, the Appellant and Respondent entered into an oral agreement whereby the Appellant transferred 144 Ethereum tokens (valuing £50,000) to the Respondent.