Baking, staking, Tezos and trusts: crypto sale and repurchase transactions analysed by the High Court

In the recent case of Wang v Darby [2021] EWHC 3054 (Comm), the High Court considered the legal characterisation of an agreement pursuant to which the claimant and defendant exchanged fixed quantities of XTZ (Tez) and BTC (Bitcoin) with the understanding that there would be a mutual restoration following an agreed period of two years; and that the defendant would use the XTZ transferred to him by the claimant during those two years to participate in maintaining the Tezos blockchain, accounting to the claimant for any profits made thereby upon restoration. This article considers three issues arising from the determination of several applications made during the course of the proceedings: (i) whether cryptoassets are fungible; (ii) whether non-fungible cryptoassets may be the subject of a vendor-purchaser constructive trust; and (iii) how stake-bonding and comparable agreements over cryptoassets as investment assets should be characterised in law.