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Permission given by English High Court to enable victims of crypto fraud to recover their Bitcoin from Kraken in British Virgin Islands

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United Kingdom

A recent decision in Walker and others v. Blockchain.com Inc. and others (LM-2021-000231) in London's Circuit Commercial Court has allowed victims of a cryptocurrency fraud to enforce a worldwide freezing injunction over Kraken, a cryptocurrency exchange based in the British Virgin Islands.

Lynda King, Sarah Waugh and Danielle Walker claim that three unknown persons — owners of three separate cryptocurrency wallets — scammed them out of £631,663 ($860,400) worth of Bitcoin. One of the accounts convinced the three customers to buy this amount of Bitcoin. The owner of the second account then fraudulently convinced them to transfer the Bitcoin into their own account as well as the third unknown person's account.

The victims obtained a worldwide "persons unknown" freezing injunction in the English High Court in October 2020 but had faced reluctance from Kraken to enforce in the British overseas territory.

As reported in our blog 'English High Court assists recovery of assets in international cryptocurrency fraud cases' last year, the English High Court has demonstrated a willingness to assist in the recovery of assets in cryptocurrency fraud cases, even where cases fall beyond geographical borders. 

This latest decision is a further step to enable victims of fraud to enforce worldwide freezing orders over crypto assets held by an offshore digital exchange.

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