Empowering crypto fraud victims: how the Law Commission's 2025 consultation paper could assist access to justice

In an era where digital assets and decentralised technologies are reshaping global commerce, the legal system is racing to keep pace.

The Law Commission’s 2025 consultation paper, “Digital assets and (electronic) trade documents in private international law, including Section 72 of the Bills of Exchange Act 1882” (the Consultation Paper), represents a significant step toward modernising the legal framework of England and Wales. By addressing the complexities of cross-border digital transactions, the paper not only aims to clarify which laws apply in disputes involving crypto-tokens and electronic trade documents, but also holds the potential to empower victims of crypto fraud. Through clearer rules on jurisdiction and legal treatment of decentralised technologies, the proposals could enhance victims’ ability to trace, freeze, and recover stolen assets, ultimately making the legal system more responsive and resilient in the face of digital innovation.

The problem: crypto fraud in a borderless world

The paper highlights how issues of jurisdiction, forum, and recognition, are particularly important in the context of crypto fraud, where victims often find themselves powerless in the face of pseudonymous actors, decentralised platforms, and assets that exist “everywhere and nowhere.” Traditional legal tools (designed for tangible property and identifiable defendants) struggle to accommodate the realities of blockchain-based transactions.

The Law Commission identifies this mismatch as a core challenge for private international law. The traditional territoriality principle (the idea that sovereign authority is limited to geographically defined territories), which underpins jurisdiction and applicable law, is increasingly strained by the omniterritorial[1] nature of digital assets and distributed ledger technology (DLT). As the Law Commission says:

“…the problem is not that the objects have no genuine connections to a single territory. Rather, it is that they exhibit too many genuine connections to too many territories, each in equal measure.”[2]

Key proposals that could help victims

The Consultation Paper makes the following recommendations:

A new power to grant free-standing information orders

In England and Wales, where a claimant has been the victim of a fraud or hack involving crypto-tokens, the only way to obtain certain types of interim relief (such as information orders) against a non-party to the litigation, is to commence, or intend to commence proceedings.

Under the Civil Procedure Rules (CPR), Gateway 25[3] allows for information orders (such as Norwich Pharmacal or Bankers Trust orders) to be served out of the jurisdiction, but only if the claimant can show that proceedings have been or are intended to be commenced in England and Wales.[4]

However, in crypto fraud cases, victims often do not yet know who the defendant is, where they are located, or indeed whether England and Wales is the appropriate forum for litigation. This makes it impossible to satisfy the requirement that proceedings are “intended to be commenced” in England and Wales, even though the claimant urgently needs information to identify the defendant or trace assets.

One of the most impactful proposals is the creation of a new discretionary power for courts to issue free-standing information orders at the initial stages of investigation.[5] This would allow victims of crypto fraud to obtain critical information, such as the identity of wallet holders or the location of misappropriated tokens, without needing to first identify a defendant or commit to litigation in England and Wales. It could therefore empower victims to take the first step toward recovery, even when the fraudster’s identity is unknown.

Clarifying jurisdictional gateways for crypto claims

The Consultation Paper recognises that there are inconsistencies in how courts have interpreted jurisdictional gateways (i.e. the procedural routes that identify the links between the dispute and England and Wales), particularly in cases involving tort and property claims related to crypto-tokens.[6]

The traditional jurisdictional gateways rely on the geographical location of the asset or the place where harm occurred. However, with decentralised technologies like blockchain, such locations are often ambiguous or non-existent. The Commission proposes reinterpreting these gateways to better reflect the non-territorial nature of digital assets.[7]

Although the Commission does not propose a new gateway specifically for crypto-tokens, it recommends interpreting existing gateways in line with general principles of international jurisdiction.[8]

For victims, this would ensure a more predictable path to justice. They would be better able to determine whether English courts can hear their case and what legal arguments are most likely to succeed.

Reforming Section 72 of the Bills of Exchange Act 1882

The Commission also provides a detailed analysis of Section 72 of the Bills of Exchange Act 1882 and puts forward detailed proposals to update the provision which determines which legal system governs specific contractual matters related to bills of exchange and promissory notes.[9]

These proposed reforms are intended to apply equally to both paper-based and electronic instruments. While this reform is broader in scope, it supports the recognition of electronic trade documents and digital instruments. These are tools that are increasingly used in fraud schemes.

By aligning the law with digital realities, the proposed reform ensures that victims of fraud involving electronic bills or promissory notes are not left in legal limbo.

Why this matters

These proposals recognise that justice must be accessible even when the crime occurs in a decentralised, borderless environment.

The Law Commission’s approach is pragmatic and forward-looking. It balances the need for legal certainty with the flexibility required to address novel challenges. Importantly, it also maintains an international outlook, ensuring that reforms are compatible with global legal standards and enforcement mechanisms.

Next steps

The consultation period runs until 8 September 2025. Final recommendations are expected in 2026.

For crypto fraud victims and their advocates, this is a critical opportunity to shape a legal framework that better protects their rights and facilitates recovery.