Giambrone & Partners successfully combats Crypto fraud with a Ground-breaking Judgment at the High Court

Crypto fraud seems to be expanding exponentially with a reported 58 per cent increase in crypto theft in the past 12 months according to a report by cyber security firm NordVPN.  Giambrone & Partners banking and financial fraud litigation team has developed a novel strategy that has resulted in a ground-breaking Judgment in the High Court enabling our client and potentially other victims of crypto fraud to claw back their stolen funds. 

For the first time the High Court of England and Wales further embraced new technology and granted permission to serve notice of proceedings on persons or persons unknown in connection with two digital wallets over blockchain by a non-fungible token (NFT).  The use of NFT through blockchain for the service of legal documentation informing the recipient that they face a legal issue will undoubtedly increase.  

Joanna Bailey who heads the banking and financial fraud litigation team commented “the nature of cryptocurrency makes it an ideal vehicle for financial fraudsters.  The lack of accountability or regulatory oversight makes it difficult to recover the victims lost funds” Joanna further commented “obtaining this judgment is extremely significant and has opened up the potential to assist many more of our defrauded clients to recover their money lost to crypto fraud.”

Giambrone & Partners now leads the field in this new innovation of NFT service having demonstrated the capability and resources, to facilitate service by NFT. Our banking and financial fraud lawyers are working with the judiciary in the use of the latest technological innovations to maximise and improve the functioning of the courts and provide the optimum legal service.

The Judge’s Order also recognised that the cryptocurrency exchanges, including Binance and OKX, hold the stolen cryptocurrency as trustees, which means that they are responsible for making sure that assets are not moved on or withdrawn from their exchanges. The ground-breaking judgment using NFT service should act to slow down the exponential rise of crypto fraud as cryptocurrency has been warmly embraced by the crypto fraudsters as they believe that there is little chance of accountability; particularly in situations where the contact details for fraudulent platforms are no longer active, which is nearly always the case. 

Demetri Bezaintes, an associate, commented “I am confident that this latest judgment using NFT service has the potential to show the way to digital service over the blockchain, with all the benefits of immutability and authentication, becoming the usual practice in the future on legal matters related to the digital world.” Demetri further remarked, “it is clear that this method of service has a far greater level of success over conventional means of service, such as post, in this sector.”

Joanna Bailey is a Chartered Legal Executive and is an associate within our Commercial and Financial Services Litigation Department

Joanna frequently leads the litigation against financial institutions involved in Forex/binary trading disputes and regulatory investigations and has some considerable success in retrieving the funds lost in fraudulent investment schemes.

Joanna has developed a range of strategies both to find the assets of the individuals perpetrating the fraudulent schemes and restore the funds to our clients. As well as recognising culpability in the organisations facilitating (but not associated with the fraud), by failing to undertake adequate due diligence.

She is highly experienced in high-value out-of-court settlement negotiations and has in-depth knowledge of the Civil Procedure Rules as well as English common law.

Demetri Bezaintes is a Greek lawyer (dikigoros) admitted to practise in England & Wales as a Registered Foreign Lawyer (RFL). He is an associate based in the London office within the financial services litigation department.

Demetri has a thorough knowledge of investment fraud and fund tracing. He works tenaciously for our clients, advising on cryptocurrency, Forex trading disputes and regulatory investigations. He draws his expertise in investment law from his experience in the banking sector and his studies in banking and financial services regulation. Before joining Giambrone & Partners Demetri worked at an international bank, where his main focus was the enforcement of freezing orders and third-party debt orders.

He approaches cross-border jurisdiction matters with a comprehensive view, based on his knowledge of both civil and common law. After qualifying as a lawyer in Greece, he obtained a Graduate Diploma in Law from the University of Westminster and is currently studying for the LPC at the University of Law.

Demetri also has experience of assisting high net worth individuals (HNWI) with real estate transactions arising from the Golden Visa scheme.

Giambrone & Partners' astute agile lawyers have developed a strategy that has provided an important lifeline to the individuals who have suffered substantial losses through crypto fraud and intend to pursue the strategy to assist our clients and restore their stolen funds.

Mr Justice Trower’s order is second only to that of the Supreme Court of the State of New York’s on 2 June this year in LCX AG, -v- John Does Nos. 1 – 25.

The Judgment below:

D Aloia V Person Unknown Final Approved Judgment 24

For more information on how to recover losses due to crypto fraud please contact Joanna’s clerk Sam Groom  SG@giambronelaw.com or please click here