Cryptocurrencies And The Irish Courts

• Published date: 15 October 2021
• Subject Matter: Technology, Fin Tech
• Law Firm: Maples Group
• Author: Mr Kyle Nolan and Kevin Harnett

The rise in the use and trading of cryptocurrencies continues apace. Unsurprisingly, this has led to their consideration by the courts. Here, we look at the trends emerging from recent High Court decisions.

Given their novel intangible form, cryptocurrencies have given rise to some uncertainty as to their legal characteristics, in particular whether they could be considered as 'property' or 'assets'. Therefore, disputes in the area will be inevitable, at least until the Courts provide more certainty. The Irish Courts, like the Courts in other jurisdictions, have to date taken a practical approach to ensure that traditional legal remedies, such as injunctions and disclosure orders, can be adapted to meet the needs of the growing significance of cryptocurrency in the commercial sphere.

At the time of writing, the total market capitalisation of cryptocurrencies is estimated to be $2 trillion. In an Irish context, research published by the Competition and Consumer Protection Commission (CCPC) last month found that one in 10 Irish investors hold cryptocurrencies, with that figure increasing to one in four among those aged 25 - 34.

This popularity comes in spite of previous warnings about the risks of cryptocurrencies from the Central Bank of Ireland and the European supervisory authorities, including the European Securities and Markets Authority. Cryptocurrencies are not recognised as legal tender in Ireland. Furthermore, while Irish transposing legislation giving effect to the EU Fifth Anti-Money Laundering Directive has recently extended anti-money laundering and countering the financing of terrorism rules to virtual asset service providers (including cryptocurrency and digital wallet providers), there is currently no other overarching Irish regulation which specifically deals with the regulation of cryptocurrencies or blockchain technology.

There is currently a proposal at EU level to introduce a new regulation on Markets in Crypto-Assets (MICA) which will introduce a new licensing regime and harmonised regulatory rules, including investor protection and conduct of business rules, for crypto-assets. Regulation of crypto-assets is, therefore, an evolving area, with more detailed consideration of that issue being outside the scope of this update.

Enforcement of Judgments

The High Court has proven willing to apply enforcement remedies to cryptocurrencies.

In Trafalgar Developments Limited v Mazepin [2019] IEHC 7, the Commercial Court granted judgment in default...