Senior Managing Partner and Head of Practice Bazul Ashhab and The Team Successfully Identified Unknown Defendants to Aid in the Recovery of Stolen Bitcoins

Bazul & Partners Litigation & Dispute Resolution and Fraud, Asset Recovery & Investigation team achieved a number of legal firsts in South East Asia. This case is likely to be the largest cryptocurrency recovery claim brought in Malaysia and required an in-depth knowledge of the operations of the cryptocurrency wallets, exchanges, and tracing methodology.

1. First ever freezing order against “person unknown” in Asia; 2. First ever Bankers Trust Order against a foreign disclosure respondent (i.e. against the cryptocurrency exchange based headquartered in offshore jurisdiction) in Asia; 3. First ever Bankers Trust Order against an employee acting in their capacity as agent of their employer in Asia; 4. First ever disclosure order against the controller of a social media account in Asia.

Head of Practice Bazul Ashhab and Senior Associate Nurul Fatihah Binti Mansor acted for a Dubai resident who have been involved in the cryptocurrency space and have invested a significant portion of his wealth into Bitcoin.

The team had to recover about 1,400 bitcoins (worth at the relevant time at about US$77 million) that were stolen from his client’s cryptocurrency wallet while he was in Australia. The bitcoins were ultimately traced into certain Bitcoin addresses held by a cryptocurrency exchange based in Singapore.

Bazul’s team successfully secured a worldwide Mareva injunction against the persons unknown before the High Courts of Singapore, to prevent the unknown defendants from dissipating their assets.

His team also applied for and obtained third party discovery from the cryptocurrency exchange, its related entities, and its representatives. Gagging orders and sealing orders were also secured in the action to prevent tipping off. The third-party disclosure revealed that the traceable proceeds of the stolen Bitcoins were controlled by 6 individuals, 4 of whom had Hong Kong identity cards, and the 2 other defendants had Russian identity cards.

The disclosure led to US and Hong Kong proceedings being commenced to recover the stolen Bitcoins. The team also applied for and secured an order issued by a High Court judge for permission to use the documents disclosed by the disclosure respondents for use in foreign civil, criminal, and regulatory proceedings against the Singapore defendants as well as third parties.