Wealthy Online Investor in Bitcoin Futures a ‘Consumer’
Can someone who trades in cryptocurrency futures or other sophisticated products via an online platform be viewed as a consumer? In a crucial decision for the investment sector, the High Court has answered that question in the affirmative.
The case concerned a woman of substantial means who, on a leveraged basis, traded in bitcoin futures online. She sued the Cypriot company that operated the relevant platform for losses she was alleged to have suffered after her account was blocked and she was refused permission to withdraw funds.
The company, however, argued that the English courts had no jurisdiction to rule on her claim. It pointed to a clause in the contract she had signed before she first traded on the platform, by which she agreed that all disputes and controversies arising would be dealt with exclusively by the courts of Cyprus.
The woman argued that that clause was of no effect because she was a consumer, within the meaning of Regulation (EU) 1215/2012, which governs the jurisdiction and enforcement of civil and commercial matters between EU member states. The company, however, responded that trading in bitcoin futures requires specialist knowledge and skill and is inherently a non-consumer activity.
In preferring the woman’s arguments, however, the Court found that her trading activity was that of a well-heeled individual playing with some of her surplus funds in the hope of making substantial gains. Observing that wealthy consumers are consumers nonetheless, the Court noted that the large sums of money involved did not change her status. She was a private individual and end user and she had not suggested to the company that she was a professional investor running a business. The Court accepted jurisdiction to hear her claim.