Crypto-Conundrums: A Case Comment on Wang v Darby [2021]

December 13, 2021


On 17 November 2021, judgment was handed down an English High Court case, Wang v Derby [2021] EWHC 3054 (Comm). The judgment is already attracting interest in ‘crypto’ circles, as it is the first contested English judgment to address the question of whether cryptocurrency can be held on trust. 

This article focuses on two aspects of the judgment: (1) the difference between ‘cryptocurrency’ and ‘crypto asset’ in English law and (2) the ‘open door’ for the recognition of Non-Fungible Tokens (NFTs) as property. 

The Facts 

The case dealt with a complex dispute between two cryptocurrency traders over an exchange of Tezos and Bitcoin. The Claimant (Wang) owned a significant amount of Tezos, an ‘alt-coin’ used for exchange purposes, which was to be exchanged for the Defendant (Darby)’s Bitcoin. 

There were multiple transactions, with the Defendant claiming that there was a sale and buy-back arrangement akin to a ‘repo’ transaction which, by definition, precluded any trust arising in respect of the Tezos.

The Claimant asserted that Tezos he had transferred to the Defendant were held by the Defendant on trust.

The issue was whether there actually was a trust of Tezos for the Claimant, or whether this was a series of legally valid ‘sale and buy-back’ transactions.

The Judgment

Stephen Houseman QC, sitting as a Deputy Judge of the High Court, at paras [78] – [81] in the judgment, held that there was economic reciprocity in the arrangement, and therefore there was no trust on the facts. The transactions were legally valid.

The main question of academic and practitioner interest – as to whether cryptocurrency ‘could’ be held on trust – was left undetermined. The Defendant accepted (at para [8]) that: (1) that cryptocurrency was property; and (2) that it could be held on trust.


The judgment exposed a couple of points in English case law which are worth drawing to attention: (1) the use of English judgments’ terminology when referring to ‘crypto’ and (2) the potential recognition of ‘Non-Fungible Tokens’ as a form of property.

(1) ‘Cryptocurrency’ vs ‘Crypto asset’

(i) The definitional debate

Firstly, Wang v Darby exposes an issue in English case law which is currently unaddressed – the difference between a ‘cryptocurrency’ and a ‘crypto asset’. The two are currently treated as synonymous in this case and previous case law, even though they are treated differently by the UK’s Financial Conduct Authority. Comparing two sections of Wang v Derby, this is apparent:

At [55]:

 ‘…it is common ground that fungible and non-identifiable digital assets such as Tezos constitute property that is capable of being bought and sold as well as held on trust as a matter of English law’.

Equally at [93]:

‘If there were serious controversy as to whether cryptocurrency constitutes property under English law, that submission may have more force. But that juridical substratum is common ground. The task of this Court is to apply well-known principles of English private law to an ultra-bespoke set of facts in which all relevant evidence is contained within the four corners of verbatim transcripts’.  

(ii) Is the ‘juridical substratum’ common ground?

It could be argued the “juridical substratum” mentioned is not yet “common ground”.  Both these sections appear to be referring to the same topic (‘cryptocurrency’), but this article would argue that the Bitcoin and Tezos should be treated differently at law – they are entirely different assets, with different purposes. There are many differences in purpose and function between the over 7000 ‘assets’ and ‘tokens’ which are commonly referred to as ‘crypto assets’. 

For example, there is probably more that divides than unites a Bitcoin and an Ethereum ERC-721 Token under the same banner. Both are broadly ‘crypto’, but Bitcoin is more a ‘cryptocurrency’ – it is primarily used as an ‘exchange token’, a decentralised tool for buying and selling goods and services. The Ethereum ERC-721 Token conversely, is more of an ‘crypto asset’, and has been used to mint ‘Non Fungible Tokens’ or NFTs, some of which, such as Beeple’s “Everyday: The First 5000 Days” have sold for eight-figure sums

As ‘crypto asset’ and ‘cryptocurrency’ disputes become more common, the difference in terminology will become more jurisprudentially relevant. Perhaps this case represents a missed opportunity to clearly demarcate the two terms.

(2) The Case as to whether ‘Non-Fungible Tokens’ are Property

Secondly, this case comment notes that Wang v Darby has ‘opened the door’ for Non-Fungible Tokens (NFTs) to be protected with proprietary remedies. 

(i) What is a Non-Fungible Token?

An NFT is a unit of data, cryptographically stored on the ‘blockchain’ – an immutable ledger which records all transactions involving a particular cryptocurrency. Merriam-Webster gives the definition of a ‘Non-Fungible Token’ as:

‘a unique digital identifier that cannot be copied, substituted, or subdivided, that is recorded in a blockchain, and that is used to certify authenticity and ownership (as of a specific digital asset and specific rights relating to it)’.

(ii) How do NFTs relate to Wang v Derby?

NFTs are not mentioned directly in Wang v Derby. Currently, NFTs are unrecognised at English common law, or at least undistinguished from ‘cryptocurrency’ in definition. At the time of writing, no specific primary or secondary legislation has addressed NFTs and there has been no English judgment at any level referring to the ‘Non-Fungible Token’.

However, at [77], Stephen Houseman QC raises an analogy which could be helpful in the quest for recognising NFTs as property:

“…It is difficult to see how a constructive trust as pleaded could arise in respect of entirely fungible and non-identifiable digital assets. There is no obvious analogy to a specifically-enforceable contract for the sale of land or some unique or sufficiently rare piece or parcel of personal property…” 

Although it is difficult to see a constructive trust arise for fungible and non-identifiable digital assets, he does not discount a trust of non-fungible and identifiable digital assets.

(iii) Comparisons between Non-Fungible Tokens and personal property 

NFTs are non-fungible and identifiable by nature, and they could be seen as the digital equivalent to a “rare piece or parcel of personal property”. In fact, they often are – take CryptoPunks, the project which inspired the ‘CryptoArt’ movement – which it was a limited run of 10,000 pieces. The theft of a CryptoPunk would arguably require an equitable proprietary remedy, such as specific performance or a constructive trust to return the CryptoPunk to its original owner.

William Morgan, in a seminal article, has claimed that equity will serve to deliver “unique articles such as heirlooms, objects of art, controlling stock in a corporation…. almost as a matter of course”. In a digital age, and with some CryptoPunks selling for over $10 million, NFTs should be seen as in the category of ‘controlling stock’, ‘objects of art’ or ‘heirlooms’.

(iv) Should the law follow the market? 

It is clear there is a market for NFTs, which is currently treating them as different to a standard ‘crypto asset’. Research by the Alan Turing Institute has shown the market is large, with over 4.7 million NFTs transferred, by more than 500,000 buyers and sellers, between 23 June 2017 and 27 April 2021. 

There has been criticism of the NFT market on the grounds that it is a “speculative bubble” and for environmental reasons as– the technology involved is energy inefficient. Some would make the argument that the law does not necessarily have to follow the market. 

However, as argued by Sir Geoffrey Vos extrajudicially in the context of ‘crypto assets’, refusing to follow the market could be at the law’s own peril. Wang v Derby leaves the door open, in this sense, for a case to be brought testing whether ‘NFTs’ are property.


Even from the perspective of an individual who desires ‘crypto assets’ to receive mainstream recognition, it is important to not conflate all cryptocurrencies as performing the same task – this would lead to a cryptocurrency conundrum.

The statements in Wang v Darby, unfortunately, continue a narrative that ‘crypto asset’ and ‘cryptocurrency’ are interchangeable terms, which is not the industry or regulatory approach. The case law is becoming worryingly confusing as to which ‘crypto assets’ and which ‘cryptocurrencies’ are ‘property’.  Wang v Darby does, however, leave the door open for the bold recognition of Non-Fungible Tokens as proprietary.

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Max Shreeve-McGiffen is a graduate of the University of Oxford and University College London, with a keen interest in technology law and plans to undertake a PhD in the legal regulation of synthetic ‘deepfake’ content.He is also the Founder and Chief Editor of the UK Public Law Blog.