Lawyers say the claim, if successful, would be ground-breaking, setting a precedent that any software developers who have ever written and contributed open-source code (code that can be used by anyone) owe duties to all the users of that code. The duty would be applicable to any digital asset, including cryptocurrencies and non-fungible tokens.
Consequently, software developers could face billion-dollar claims from owners of cryptoassets with whom they have had no previous contact—a major deterrent to open-source coding.
Ruling in Tulip Trading (a Seychelles company) v Bitcoin Association & Ors [2023] EWCA Civ 83 last week, the court found there was a ‘serious issue to be tried’—the prerequisite for serving proceedings on persons outside the jurisdiction of the English courts.
Tulip Trading is owned by computer scientist Dr Craig Wright, who claims to be the creator of bitcoin and the identity behind the pseudonym Satoshi Nakamoto, issued a multi-billion dollar claim against 16 cryptocurrency developers, alleging private keys were hacked and removed from Wright’s computer, meaning Tulip was unable to access crypto-assets worth £3bn. Tulip claims the developers of the relevant software owe the company a fiduciary duty and duty of care to assist Tulip to regain access and control of the assets via a software patch.
The defendants are open-source developers who voluntarily write and post code to GitHub, an open-source forum, and are not based in England.
James Ramsden KC, acting for the defendants, said: ‘The courts in this jurisdiction continue to lead the common law world in developing a legal structure for the de-fi sector [decentralised finance].
‘This case will be the most important so far in maintaining that lead and continuing to establish this jurisdiction as the leader for de-fi litigation. The outcome of this claim at trial will therefore have a profound impact and not just in the UK.
‘That impact will apply regardless of whatever regulation the UK government eventually settles on. So watch this space.’
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