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.

Demetri Bezaintes, an associate, 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.” Demetri 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.

Demetri Bezaintes has a thorough knowledge of investment fraud and fund tracing. He works tenaciously for our clients, advising on cryptocurrency, Forex trading disputes and regulatory investigations. He draws his expertise in investment law from his experience in the banking sector and his experience in banking and financial services regulation. Prior to joining Giambrone & Partners Demetri worked at an international bank, where his main focus was the enforcement of freezing orders and third-party debt orders.

He approaches cross-border jurisdiction matters with a comprehensive view, based on his knowledge of both civil and common law. After qualifying as a lawyer in Greece, he obtained a Graduate Diploma in Law from the University of Westminster.

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