Ruscoe v Cryptopia LTD (In Liquidation) - [2020] NZHC 728

Date of Judgment

08 April 2020

Media release

Ruscoe v Cryptopia Ltd media release (PDF 154 KB)

Decision

Ruscoe v Cryptopia LTD (In Liquidation) (PDF 565 KB)

Summary

Liquidation of Cryptopia, a company operating a cryptocurrency exchange. Application by liquidators for directions as to how to distribute company’s assets, including cryptoassets. Whether cryptocurrencies “property” in terms of Companies Act 1993. Whether cryptocurrencies held on trust by company for accountholders.
Held:
1. All of the cryptocurrencies constitute “property” under the Companies Act.
2. The cryptocurrencies are held on express trust by Cryptopia for the accountholders as beneficiaries. A separate trust exists for each type of cryptocurrrency.
3. If the liquidators are unable to identify any particular accountholder, the process prescribed by s 76 Trustee Act 1956 should be followed.
4. To the extent the liquidators recover stolen digital assets, they are to be dealt with pro rata within each specific trust according to the amounts recovered assessed against the amounts stolen.