While crypto-related fraud reached an all-time high in 2021, with illicit addresses receiving US$14bn over the course of the year*, up 79% on the previous year, matters brought before courts remain comparatively low, in large part due to a lack of funding options for otherwise meritorious lower-value claims.
Under the new collaboration, Asset Reality, Grant Thornton UK LLP, Outer Temple Chambers, Rahman Ravelli have established a triage system for the initial assessment of claims, with investigatory and corporate intelligence expertise then deployed to contextualise claims for legal assessment. Meritorious claims will be assessed and financed on a portfolio basis by Sandton Capital which has dedicated £50m for crypto-related litigation; with portfolio facilities allowing for greater flexibility to finance multiple claims that otherwise would likely not have met funders’ investment thresholds had each claim been considered on a stand-alone basis.
Commenting on the collaboration, Justina Stewart, Barrister at Outer Temple Chambers, says: “This is a real opportunity to push the boundaries of the law by working symbiotically with true experts, for the benefit of those who have been defrauded by increasingly sophisticated crypto frauds. All too often, potentially meritorious crypto fraud claims don’t get off the ground because of lack of funding and joined-up thinking between real specialists. Having been involved for years in and being at the forefront of the fascinating world of crypto-related litigation, our Outer Temple counsel are thrilled to be involved in this collaboration.”
Matt Meehan, Head of Sandton UK & Europe, adds: “Crypto fraud investigation, tracing, litigation and recovery is an evolving area of contentious disputes and we will allocate an initial £50m to fund crypto fraud claims. In London, we have assembled world class panels of crypto-focused investigators, solicitors, barristers and asset tracing professionals to support claimants in all aspects. The team at Sandton hopes to alleviate concerns by offering bespoke and transparent funding solutions to support one-stop crypto fraud recovery.”
Carmel King, Director at Grant Thornton UK LLP, Insolvency and Asset Recovery, says: “Our team has used (and provided) litigation funding for years, and we know it can facilitate access to justice for impecunious estates and their creditors. I am delighted that this collaboration widens the range of options available to victims of fraud in the investigation, litigation and recovery of their cryptoassets.”
*Chainalysis: The 2022 Crypto Crime Report (Feb 2022)
Asset Reality is the world’s first end-to-end solution for complex assets. Its platform provides services and tools to public and private sector companies investigating, managing and recovering assets. From helping crypto companies support victims of fraud, to enabling governments to manage and realise portfolios of seized assets, its mission is to improve asset recovery for victims and society. Launched via the Techstars accelerator programme, Asset Reality partners with leading digital custodians, blockchain analytic companies and asset recovery practitioners to give users access to the services they need on one easy-to-use platform. Asset Reality is a founding member of CFAAR (Crypto Fraud and Asset Recovery network.)
Launched in 2021, Grant Thornton UK LLP’s Crypto Initiative combines the firm’s expertise across corporate intelligence, blockchain data analytics, insolvency and asset recovery, digital forensics and forensic expert testimony on matters including cryptoasset tracing and recovery, investment scams, director fraud/mismanagement, fraudulent ICOs, due diligence for regulators and other parties, ransomware/hacks, exchange due diligence and insolvency and dispute resolution. Grant Thornton UK LLP is a founding member of CFAAR.
Outer Temple Chambers has established itself as one of the leading barristers’ chambers in cryptocurrency disputes. It has barristers at every level of seniority who have already litigated and advised on cryptocurrency disputes in England and Wales and other jurisdictions. Its barristers are also involved in advising legislators on law reform relating to cryptocurrency and smart contracts and are committed to developing the law in this exciting and challenging area.
Rahman Ravelli has carved itself a reputation for bringing some of the most significant crypto-related fraud cases to date, a number of which have helped establish the law in this area. It is a market-leading legal firm with a track record of success in commercial litigation, financial crime and cross-border investigations. Rahman Ravelli advises individuals and corporations on national and international matters involving asset tracing and recovery, civil fraud, complex business disputes and criminal and regulatory investigations. Rahman Ravelli is a founding member of CFAAR.
Sandton and its affiliates have executed investments totalling over £1.3bn across a diverse range of industries in Europe and North America. It is backed by leading university endowments, pension funds and financial institutions, Sandton will allocate an initial £50m to fund crypto fraud claims and is supported by a team of crypto-focused professionals assisting claimants in all aspects. Sandton is authorised and regulated by the Financial Conduct Authority (FCA) and the Securities and Exchange Commission (SEC).
