The United Kingdom High Court has ruled that stablecoin Tether is property — the first-ever ruling under English law on the treatment and status of cryptocurrency after a full trial.

The legal status of Tether ( USDT ) was a preliminary issue in a case brought by a fraud victim whose stolen crypto — including Tether — was offloaded through various crypto exchanges after being put through crypto mixers.

“USDT attract property rights under English law,” High Court of Justice Deputy Judge Richard Farnhill said in the Sept. 12 ruling .

The judge added that USDT was “rather a distinct form of property not premised on an underlying legal right” and can be the “subject of tracing and can constitute trust property in the same way as other property.”

He noted a “strong line of authority” that cryptocurrencies are property from a 2019 judgment in the same court that wasn’t made at trial. It was also consistent with the England and Wales Law Commission’s position in a 2023 digital assets report marking them as property.

The decision comes one day after a UK government bill would clarify that non-fungible tokens (NFTs), cryptocurrency and carbon credits are “things” and “personal property” under property laws.

Thai crypto exchange ducks suit

The victim and suit plaintiff Fabrizio D’Aloia failed to show that Thai exchange BitKub was “enriched” by receiving 400,000 USDT — of which 46,291 USDT was supposedly traced from D’Aloia’s fraudsters — the judge ruled.

Farnhill acknowledged the fraud but wasn’t convinced that a BitKub wallet received D’Aloia’s USDT because of the use of crypto mixers.

Quillon Law partner Nicola McKinney, who represented Bitkub, explained to Cointelegraph that the judge concluded USDT could, in principle, be identified in mixed pools, but D’Aloia “could not evidence on the balance of probabilities that any of his USDT could be traced to the relevant Bitkub wallet.”

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Farnhill said there was no “defective transaction” between D’Aloia and Bitkub to “undo.”

“The legal link connecting Mr D’Aloia with Bitkub is simply missing from his claim. For this reason, too, he cannot succeed in his breach of trust claim.”

Matt Green, the blockchain and digital assets head at law firm Lawrence Stephens, told Cointelegraph the case is a lesson for analytic report providers to ensure evidence is clearly articulated by courts.

“It is vital that legal teams understand the fact patterns carefully in order to advance proprietary claims and ensure mixing issues are dealt with accordingly,” he said.

The court heard that D’Aloia transferred a total of 2.5 million British pounds ($3.3 million) to the fraudsters across several transactions.

D’Aloia also named Binance, Polo Digital Assets, Gate Technology Corp, Aux Cayes Fintech and the scammers, who are named as “persons unknown.”

An application for summary judgment against the parties is to be determined, and consequential orders will be heard at a later date.

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