The High Court closes UK Crypto-asset business due to International Fraud

Crypto asset mining allows transactions to be accounted for and entered on the blockchain and added to a distributed ledger. Any transactions are validated on the blockchain network which prevents double-spending; when cryptocurrency is spent it must be updated in the digital ledger.

BTCMining Limited managed a cryptoasset mining company registered in the UK and registered in January 2024. The company operated globally offering cryptomining services which involved customers being invited to pay for mining contracts with the opportunity of earning returns from the mined crypto assets. However, there were a considerable number of complaints from their clients from across the world, including countries such as far flung as Estonia, Mauritania, Iran, New Zealand, Poland, and Romania, stating that payments were made for services that were not received. Also, often the clients were being asked for additional payments. 

Following a High Court ruling, the company was shut down in April 2025 due to the allegations of fraud and misconduct. The Court heard that, contrary to Companies House rules, the registered address provided by the business was a P.O box address which is not valid as Companies House requires a physical address to enable documents and notices to be delivered and access to a business must be available to the public. The associated websites were either inactive or provided the same contact details. This meant that neither the clients of the company or the investigating officers from the Insolvency Service could contact the principals of the company.

Stibich Martins Yhaicha Luzia, the sole director, had not submitted any statements or accounts since its inception. Many of the clients contacted Action Fraud which led to the involvement of the Insolvency Service to investigate as clearly the business was not conforming to the rules on clarity and and access. Insolvency Service Chief Investigator, David Usher said “the fact that BTCMining Limited was attracting customers globally makes our intervention particularly important. We acted on the complaints before their reach could have affected countless more individuals. It’s vital that the public, both here in the UK and abroad, are protected from companies acting in this way.”

The Insolvency Service investigators believe that the clients of the company lost considerably more money than the amounts that they have traced and doubtless there are many other individuals that took up the opportunity for crypto asset mining than those that complained to Action Fraud.

Joanna Bailey, a partner commented “The cryptocurrency sector has woefully few regulations to protect consumers. Also, the status of cryptocurrency varies across the world from being warmly embraced as currency to being banned. There is very little regulation of the cryptocurrency sector and anyone considering getting involved should be very cautious and not make big investments immediately regardless of whether you believe the opportunity is likely to be short-lived.” Joanna further point out “frequently fraudulent companies operate on a short-term basis on the expectation of being recognised as charlatans fairly quickly and the money they obtain is spirited away beyond the reach of the victims and the authorities as soon as possible.”

Giambrone and Partners banking and financial fraud litigation department is highly experienced in challenging the frauds perpetrated in the cryptocurrency sector and has many strategies to recover money lost to fraud. Our lawyers have instigated ground-breaking legal cases that have changed the way fraudsters can be pursued through the courts. They can no longer avoid the legal consequences of their deceptive behaviour by anonymity. Financial fraud has spiralled across the globe and the implementation of vigorous regulations to control the rise of such fraud is urgently required.

Joanna Bailey heads our banking and financial fraud litigation department.

Joanna frequently leads the litigation against financial institutions involved in cryptocurrency trading disputes, as well as Forex investment issues and regulatory investigations and has some considerable success in retrieving our clients' funds lost in fraud.

She has developed a range of strategies both to find the assets of the individuals perpetrating the fraudulent schemes and restore the funds to our clients. As well as recognising culpability in the organisations facilitating (but not associated with the fraud), by failing to undertake adequate due diligence.

Joanna led the first case in Europe where proceedings were served on Persons Unknown connected with two digital wallets over the blockchain by non-fungible token or ‘NFT’ in a cryptocurrency fraud. Following this ground-breaking case Joanna was named as Lawyer of the Week in the Financial Times.

Joanna is highly experienced in high-value out-of-court settlement negotiations and has in-depth knowledge of the Civil Procedure Rules as well as English common law.

If you think that you have been defrauded and would like assistance in recovering your money please click here.