#cryptoinsolvencyseries – User Agreements and the ownership conundrum

Imagine Australian crypto-exchange (HudCoin) is placed into external administration and your Crypto Assets and Fiat Currency are sitting in your user account.


Is ownership with HudCoin for the benefit of creditors or user owned or something else?

I think we need to determine this before we determine the question of whether Crypto Assets are even capable of being ‘owned as an asset?’ (Or are they a commodity?) … as it’s that party’s problem then.

Read more about my #cryptoinsolvencyseries here: #cryptoinsolvencyseries: Introduction

In all of the cases I read on Today’s Question, the Court looked at the User Agreement.

So I did a deep dive of 8 relatively well known cryptoexchange‘s User Agreements. I actually looked at about 20 User Agreements, but many had little to no details. This was only a subset of many thousands of others not reviewed.

I looked at key terms, like:

  • ownership/title
  • security/liens
  • how Fiat is held (custody? trust? mixed in general assets)
  • Fiat segregated from other funds?
  • private keys stored by the exchange?

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What I found, was quite alarming!

4 out of the 8 exchanges didn’t give me a straight answer.

Others were mixed: 2x trusts, 1x custody in Singaporean bank, and 1x that might require equitable tracing.

… lawyers know how hard and expensive equitable tracing is.


A trust-beneficiary-relationship argument is worthy; but hope HudCoin has a fair User Agreement.

svvoidables cryptoassets

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