Is decentralised governance of bitcoin really a myth? The fiduciary duties of cryptoasset software developers is a serious issue to be tried

3 min read

White & Case Tech Newsflash

"If the decentralised governance of bitcoin really is a myth, then in my judgment there is much to be said for the submission that bitcoin developers, while acting as developers, owe fiduciary duties to the true owners of that property."1

The long-awaited Tulip Trading appeal judgment is out and the English Court of Appeal has found in favour of Tulip Trading Limited, reversing the first instance decision.

A reminder of the High Court’s Decision

As we discussed in our previous alert,2 following an alleged hacking and subsequent alleged theft of keys controlling approximately £3 billion in cryptoassets (the "Cryptoassets"), Tulip Trading Limited ("Tulip") issued proceedings against a number of crypto developers (the "Developers") who it said controlled and ran the relevant bitcoin networks. Tulip claimed that the Developers owed Tulip a fiduciary duty and/or tortious duty of care, such that the Developers were obliged to assist Tulip in regaining control and use of the Cryptoassets.

As the Developers were located outside of the English jurisdiction, Tulip obtained the court's permission to serve the proceedings on them; the Developers subsequently contested permission to serve out and sought to set aside the original order.

The High Court dismissed Tulip's claim on the merits, holding that that there was no serious issue to be tried and no realistic prospect of Tulip succeeding in establishing that a breach of fiduciary or tortious duty had taken place. Tulip appealed that decision, and it fell to the Court of Appeal to determine whether there was, in fact, a serious issue to be tried on whether developers who look after cryptoassets owe fiduciary duties or duties in tort to an owner of that cryptocurrency.

The Court of Appeal’s Decision

Delivering the lead judgment for the Court of Appeal, Lord Justice Birss provided a helpful overview of the case law on fiduciary duties before allowing the appeal, concluding that the position "…is not that there is a fiduciary duty in law in the circumstances alleged by Tulip, only that the case advanced raises a serious issue to be tried. The time to decide on the duty in this case is once the facts are established."3

While recognising that for Tulip's case to succeed it would involve a significant development of the common law on fiduciary duties.4 Lord Justice Birss considered that there was a realistic argument, as follows:

"The developers of a given network are a sufficiently well defined group to be capable of being subject to fiduciary duties. Viewed objectively the developers have undertaken a role which involves making discretionary decisions and exercising power for and on behalf of other people, in relation to property owned by those other people. That property has been entrusted into the care of the developers. The developers therefore are fiduciaries…The content of the duties includes a duty not to act in their own self interest and also involves a duty to act in positive ways in certain circumstances. It may also, realistically, include a duty to act to introduce code so that an owner's bitcoin can be transferred to safety in the circumstances alleged by Tulip."


The case heads now back to the High Court for a full trial on the merits and will be of significant interest to all involved in the crypto field, both in this jurisdiction and internationally. While the Court of Appeal's decision does not answer the question of whether fiduciary or tortious duties are in fact owed by developers to cryptoasset owners, the substantive trial will be an important step towards providing clarity on the legal relationship between cryptoasset owners and the blockchain developers.

1 Per Lord Justice Birss in Tulip Trading -v- Van der Laan & Ors [2023] EWCA Civ 83, [91].
2 See: Left to their own devices: No duty arises between cryptoasset software developers / controllers and cryptoasset owners | White & Case LLP (
3 Supra. at [91].
4 Supra. at [86].

Emma Thatcher (Senior Professional Support Lawyer, White & Case, London) contributed to the development of this publication.

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