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The ruling comes as the government proposes a new classification of property that would specifically cover cryptocurrencies.
The High Court of Justice for England and Wales said Tether's USDT stablecoin, the largest by market cap, can be considered property in a ruling one day after the U.K. government started legislating on the status of cryptocurrencies.
“USDT attract property rights under English law, ” Richard Farnhill, a deputy high court judge, said in the court filing on Thursday. “It can be the subject of tracing and can constitute trust property in the same way as other property.”
The case was brought by Fabrizio D'Aloia, who said he was the victim of a cryptocurrency scam, and relates mainly to crypto exchange Bitkub, named as one of seven defendants including two unidentified people and Binance, the largest crypto exchange by volume traded. The case against Binance was settled, according to the filing.
D'Aloia claimed he was induced to hand over cryptocurrency in the form of USDT and Circle's USDC totaling around 2.5 million pounds ($3.3 million) by an unidentified defendant. The alleged scammer passed the funds through various blockchain wallets before it was withdrawn by the other unidentified defendent as fiat currency through Gate and Bitkub.
On Wednesday the government introduced a bill paving the way for crypto to be treated like property. The bill, drafted by independent statutory body the Law Commission, had its first reading in Parliament. Farnhill's ruling echoes the bill's assertion that crypto is neither a thing “in possession,” which covers items such as money and cars, nor a thing “in action,” such as debt and shares, but is property nevertheless.
Still, the judge concluded in favor of Bitkub, saying D'Aloia has no claim against the company because “it did not receive anything from him.”
Read more: How Crypto Might Shake Up England's Ancient Property Laws