The B.C. Supreme Court case of a man found not guilty of theft highlights the difficulties in controlling, tracing and recovering cryptocurrency.
Because cryptocurrency is virtual, it can be more challenging for authorities to track its chain of possession, Judge Ward Branch said in his decision, released this week.
“Theft of physical property is relatively easy to describe. One person owns an object. Another takes that object without permission. That is theft.
“But what if the relevant property is a series of digital 1s and 0s, protected by multiple passwords and protocols? When and how is such property stolen?”
Branch said authorities will need to “adjust to these new realities and find ways to show the court whose hands the cryptocurrency has migrated to.”
Expert evidence may be required, he said, “particularly at this early stage of cryptocurrency’s integration into our basic legal principles.”
Branch found Orion Alexander Holtby not guilty of theft, false pretences and defrauding Joelle Oman, saying he had a reasonable doubt on all three charges.
Although Branch did not make a formal order, he urged Holtby to help Oman access her cryptocurrency. “I encourage you to consider doing so after taking appropriate advice from your counsel. Any such assistance would be a way to honour the affection I sense you once had for each other.”
Holtby and Oman had a personal relationship in the past, court heard.
They reconnected on social media in 2021, court was told. By this time Oman had invested about $92,200 — the bulk of the money she had after selling a house in Port Alberni — in digital currency, but had started to distrust the person assisting her.
She told Holtby about her investments and he said he had also invested in cryptocurrency. Arrangements were made to transfer her digital coins into a new account set up with Holtby.
But she could not gain access to the account and in April, she went to the police.
Branch said he had concerns about Oman’s reliability, saying she was careless with her evidence.
Although he believes it is “likely” that Holtby took the cryptocurrency, he said there is reasonable doubt, noting it was Oman who asked Holtby for help with it.
Little about Holtby’s communications indicated he was planning to steal her coins, he said.
Holtby was in treatment for addiction, which could explain a communication breakdown, Branch said.
Oman was unsophisticated as far as managing cryptocurrency, the judge said, noting one plausible scenario is that Oman does not understand how to access her account or has lost the information necessary to access the account.
The coins may be simply “orphaned” in the account under Oman’s name, Branch said.
“I simply do not have enough evidence to establish that the plaintiff lacks an avenue for control of her coins or that the accused has taken control over her coins.”
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