Nancy Carol Smithers & Anor v Persons Unknown Category 1 & Ors

A material innocent non-disclosure does not automatically require a freezing injunction to be discharged. The court must assess the circumstances, any actual or potential prejudice, available remedies and proportionality. Innocent third parties affected by cryptocurrency tracing may be protected by the cross-undertaking in damages.

Urgent cryptocurrency injunction applications may properly be made without notice where notice could alert substantive defendants. Cryptocurrency exchanges do not necessarily have the status or regulatory position of banks. The court may continue relief where jurisdiction is apparent and no successful jurisdictional challenge has been made.

The claimants alleged that they had been deceived into transferring cryptocurrency and obtained a freezing injunction and associated relief on 13 November 2025. The matter came before the Commercial Court on the return day. A cryptocurrency tracing methodology had produced possible false-positive addresses, and Binance objected to continuation of the order on grounds including the without-notice procedure, jurisdiction, non-disclosure and possible prejudice to innocent parties.

The court considered whether the non-disclosure required discharge, whether the original without-notice application was justified, whether jurisdiction existed, and whether the injunction and associated disclosure provisions should continue.

1. Non-disclosure. The claimants had made a material but entirely innocent non-disclosure because the limitations of the LIFO tracing methodology were not known to their legal team. The possibility of false-positive private cryptocurrency addresses did not, on the information available, establish actual prejudice. It was disproportionate to discharge all or part of the injunction. The non-disclosure was recorded, with provision to communicate with affected persons and preserve any claim under the cross-undertaking in damages (paras 2–6).
2. Without-notice procedure. An urgent application for a cryptocurrency injunction may properly be made without notice where giving notice could alert the substantive defendants. Cryptocurrency exchanges do not yet have the status of banks or operate within the same regulatory regime. Prior notice to an exchange did not make the without-notice application inappropriate (para 9).
3. Jurisdiction and fair presentation. Jurisdiction existed on the face of the material before the court, and no successful challenge had established that the court lacked jurisdiction over cryptocurrency-related injunctions. A breach of the obligation of fair presentation does not inevitably require an order to be set aside; the consequence depends on the circumstances and the court’s discretion (paras 10–14).
4. Continuation and disclosure. None of Binance’s objections required discontinuance of the order, which was continued. In the interests of justice, the claimants were permitted to disclose basic identifying details of cryptoasset holders to relevant law-enforcement agencies. No privilege attached to disclosure of those identities, and disclosure could assist both the claim and any appropriate enforcement proceedings (para 15).