Do bitcoin developers have a fiduciary duty to bitcoin owners? No, says UK court

Do bitcoin developers have a fiduciary duty to bitcoin owners?

A company managed by the infamous Craig Wright claimed so. The main claim boiled down to this: if you lose your bitcoin (or other crypto assets) because the private keys stored on your computer get hacked, then the bitcoin core developers have a legal obligation to fork the network to give you your coins back. That’s an incredibly bold assertion to make, even for a Wright-linked company.

The court wasn’t convinced: “it is very hard to see how TTL’s case on fiduciary duty is seriously arguable,” the judge wrote in her judgment. “I do not think that bitcoin owners can realistically be described as entrusting their property to a fluctuating, and unidentified, body of developers of the software, at least in the sense and to the extent claimed by TTL”.

A couple other interesting points from the judgment.

  1. Developers may still face some duties: if they would insert a bug into the software for their personal interest, “it is conceivable that some form of duty could be engaged in that situation”. But that’s a far cry from claiming that developers have to protect bitcoin or bitcoin cash owners from losing their assets.
  2. The court also acknowledged that “developers are a fluctuating body of individuals” and that “as a general proposition it cannot realistically be argued that they owe continuing obligations to, for example, remain as developers”.
  3. Even if the developers owed a fiduciary duty to token-holders, that would be owed not to Wright’s company alone, but to all token-holders. However, “the steps that TTL would require the Defendants to take would be for its benefit alone, and not for the benefit of other users.”
  4. Several defendants argued the UK wasn’t the proper jurisdiction to litigate the case, but the judge didn’t need to discuss this in-depth. Her initial thoughts were Wright’s company could bring the case in the UK, where Wright resides, although it is incorporated in the Seychelles. With the defendant-developers “based in a number of different jurisdictions”, there “is no other  jurisdiction with which I can see a closer link than England,” the judge concluded.
  5. A disclaimer in the Bitcoin Core code is “relevant” to assess  a duty of care, the judge wrote, but it was “not clear” to her that the disclaimer “would reasonably be understood to mean that controllers of the BTC Network assume no responsibility for any aspect of its operation.”
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