THE BOTTOM LINE
- Global Reach: Foreign crypto exchanges can be compelled by Dutch courts to freeze accounts and disclose user information if linked to fraud affecting victims in the Netherlands.
- Powerful Tool for Victims: This ruling provides a fast-track legal route for fraud victims to secure stolen digital assets, creating significant leverage before the funds can be moved again.
- Compliance is Not Optional: The court backed its order with significant financial penalties (€100,000 for the freeze, plus daily fines for non-disclosure), signaling that non-compliance poses a serious financial risk for platforms.
THE DETAILS
In a significant move for victims of crypto-related fraud, the District Court of The Hague granted an urgent preliminary injunction against Deribit, a crypto exchange registered in Dubai and Panama. The case was brought by a Dutch resident who claimed to have been defrauded after their assets were transferred to accounts on the Deribit platform. As the exchange did not appear in court to defend the claim, the judge issued a default judgment, granting the victim’s requests in full and demonstrating the court’s willingness to act decisively to prevent further harm.
The court’s decision to assert its authority is a key takeaway for international businesses. Jurisdiction was established on the grounds that the “harmful event“—the fraud itself—occurred in the Netherlands. This principle means that a company’s physical location or country of incorporation does not shield it from the reach of Dutch courts when its platform is used to facilitate fraud impacting Dutch residents. This precedent removes a significant barrier for victims who might otherwise face the daunting and expensive task of litigating in multiple foreign jurisdictions.
The remedies granted were both swift and comprehensive. The court ordered the platform not only to freeze the specified accounts but also to do so without notifying the account holders, preventing them from moving the assets. Furthermore, the exchange was ordered to provide a full statement of the frozen assets and relevant transaction histories to the victim’s lawyers. Crucially, the order includes a provision to compel the exchange’s cooperation in transferring the assets to the victim, should the victim succeed in a subsequent main proceeding against the alleged fraudster. This multi-layered approach effectively locks down the assets and provides the victim with the critical information needed for recovery.
SOURCE
Source: Rechtbank Den Haag (District Court of The Hague)
