Chris Lin<\/strong>, Valuation Manager at Interpath<\/strong><\/a>
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\nThis article was featured in Jus Mundi<\/a>‘s 2025 Arbitration Year in Review<\/strong>, an annual publication analyzing arbitration developments across 40+ jurisdictions on 6 continents. This edition brings together young practitioners and senior experts to capture the year’s most significant legislative reforms, enforcement trends, and institutional innovations.<\/p>\n\n\n\n
\nDownload now<\/a><\/div>\n<\/div>\n<\/blockquote>\n\n\n\n<\/div>\n\n\n\nNavigating Crypto Disputes: Legal Framework, Emerging Regulation & Valuation Challenges <\/strong><\/h2>\n\n\n\n
Cryptoassets in Arbitration<\/strong><\/h3>\n\n\n\n
As cryptoasset markets expand, disputes over digital assets have increased, typically involving fraud, misrepresentation, platform failures, or contract breaches. With evolving exchange practices, rising requirements for expert knowledge, and continual regulatory change, arbitration is rapidly becoming the favoured avenue for resolving disputes across this complex and globalised industry. Key reasons include:<\/p>\n\n\n\n
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- Jurisdictional Neutrality<\/strong>: Cryptocurrency transactions often span multiple jurisdictions, creating uncertainty in litigation. Arbitration allows parties to select a neutral seat and governing law, reducing unpredictability.<\/li>\n\n\n\n
- Confidentiality<\/strong>: Given the sensitivity of digital asset holdings, arbitration\u2019s confidentiality is attractive compared to public court proceedings.<\/li>\n\n\n\n
- Technical Expertise<\/strong>: Arbitrators can be chosen for their understanding of cryptoasset technology. Experts with specialised knowledge of blockchain and cryptocurrency can assist arbitration tribunals in interpreting technical and factual issues.<\/li>\n\n\n\n
- Flexibility and procedural autonomy<\/strong>: Parties can design a process that suits the complexity of cryptoasset disputes including accelerated timelines, virtual hearings and tailored disclosure requirements. <\/li>\n\n\n\n
- Speed and efficiency<\/strong>: Cryptoasset markets move quickly, and urgency is often required (as in AA v Persons Unknown & Ors, Re Bitcoin,<\/em> [2019] EWHC 3556<\/a>). Arbitration often provides a faster resolution and a streamlined procedure.<\/li>\n\n\n\n
- Enforceability of awards<\/strong>: Unlike court judgements, arbitral awards are globally enforceable, less vulnerable to jurisdictional challenges, and recognised even when crypto laws vary between countries.<\/li>\n<\/ul>\n\n\n\n
English law supports arbitration even in complex cryptoasset disputes. In Grosskopf v Grosskopf & Ors<\/em> [2024] EWHC 291<\/a>, the court confirmed that seeking remedies beyond a tribunal\u2019s powers does not render a dispute inarbitrable.<\/p>\n\n\n\n
<\/div>\n\n\n\nChanges in UK Regulation<\/strong><\/h3>\n\n\n\n
The legal landscape for cryptoassets is rapidly changing. The United Kingdom<\/a> (\u201cUK<\/strong>\u201d) has moved from a fragmented approach to a comprehensive regulatory regime through the Financial Services and Markets Act 2000 (Regulated Activities and Miscellaneous Provisions) (Cryptoassets) Order 2025<\/a>. <\/em><\/strong>Key developments are as follows.<\/p>\n\n\n\n
FCA Draft Framework<\/strong><\/h3>\n\n\n\n
The Financial Conduct Authority (\u201cFCA\u201d<\/strong>) published its draft rules for regulating cryptoasset activities<\/a> on 17 September 2025, aiming to apply comparable standards to those governing traditional financial services (the \u201cDraft Framework\u201d<\/strong>). <\/p>\n\n\n\n
Under the Draft Framework, firms operating cryptoasset trading platforms, providing custody services, issuing stablecoins, or engaging in lending, borrowing, and staking will require FCA authorisation. The proposals also extend the FCA Handbook<\/a> requirements, such as governance, operational resilience, and financial crime controls, to cryptoasset firms.<\/p>\n\n\n\n
In addition, the FCA is consulting on measures to enhance market integrity, including admission and disclosure standards for cryptoassets and a market abuse regime tailored to digital markets. Prudential requirements for stablecoin issuers and custodians are also under consideration, alongside potential application of the Consumer Duty<\/a> to cryptoasset businesses.<\/p>\n\n\n\n
While the framework may lead to greater consumer protection and market confidence, it also introduces higher compliance burdens and capital requirements, which may challenge smaller businesses and create new compliance related disputes. <\/p>\n\n\n\n
Property (Digital Assets) Bill<\/strong><\/h3>\n\n\n\n
The Property (Digital Assets) Bill<\/a> was introduced to Parliament on 11 September 2024, and seeks to enhance legal clarity around the treatment of digital assets in response to the Law Commission\u2019s recommendations in 2023.<\/a> It explicitly states that Digital Assets<\/a> (e.g. cryptocurrencies, tokenised representations of real-world or financial assets, and other blockchain-based instruments) can be considered as personal property. The Bill received Royal Assent on 2 December 2025. <\/p>\n\n\n\n
This develops and formalises the precedent set in Director of Public Prosecutions v Briedis <\/em> [2021] EWHC 3155 (Admin)<\/a>, where the High Court determined that cryptocurrency falls within the definition of property under the Proceeds of Crime Act 2002<\/a> s.316(4).<\/p>\n\n\n\n
The Bill will strengthen legal protections for digital asset owners while providing clearer guidance for courts and tribunals in resolving disputes over digital holdings. Hong Kong is a leading venue for cryptocurrency-related disputes, partly due to its recognition of cryptocurrency as property under Hong Kong law. As the UK is expected to adopt a similar approach, this could make it an increasingly attractive jurisdiction for resolving digital asset disputes.<\/p>\n\n\n\n
Valuation Challenges in Expert Evidence<\/strong><\/h3>\n\n\n\n
The nature of cryptocurrency-related disputes introduces new valuation challenges and technical complexities that extend beyond traditional financial modelling. These valuation intricacies raise significant procedural complications, requiring tribunals to provide clear directions on methodology, disclosure, and the timing of updates to ensure fairness and consistency in the arbitration process.<\/p>\n\n\n\n
Expert Evidence in Cryptoasset Arbitration<\/strong><\/h3>\n\n\n\n
Guidance from the Ciarb (Chartered Institute of Arbitrators)<\/a> emphasises that an expert\u2019s overriding duty is to assist the tribunal, not the party who appointed them. Although this is already considered as best practice, tribunals have been critical of expert witnesses who do not expressly acknowledge Ikarian Reefer<\/a> guidance. <\/p>\n\n\n\n
A procedural implementation of further guidelines arising from the Ciarb Expert Witness Evidence Project<\/a> may result in explicit directions on the scope and format of expert evidence, together with protocols that establish expert evidence as a shared responsibility among the parties, their counsel, and the tribunal. This highlights that arbitrators with true expertise in the sector may be needed for part of the panel.<\/p>\n\n\n\n
Volatility of Cryptocurrency Results in High Variability in Quantum of Damages<\/strong><\/h3>\n\n\n\n
A recent arbitration case, in which the author provided expert evidence, highlighted that selecting the date for calculating cryptocurrency denominated damages is crucial, as price volatility in the sector can greatly alter the amount awarded.<\/p>\n\n\n\n
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