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Trends in the Field of Arbitration Related to Crypto Assets.

Written by Atanas Kostov

 

Тrends in the Field of Arbitration Related to Crypto Assets.

 

1.Introduction.

In 2025, the global arbitration landscape is experiencing dynamic development, driven by the expanding use of cryptocurrencies, blockchain technologies, and non-fungible tokens (NFTs). As a result, there is a growing need for specialized arbitrators and experts who understand not only the legal but also the technological nature of crypto assets—a fact that currently has no legal or technological debate in Bulgaria. While at the beginning of the decade disputes related to crypto assets were primarily addressed within court proceedings, today leading international crypto platforms—such as Binance, Bitcoin.com, OpenSea, and OurSong—are increasingly choosing arbitration as the preferred mechanism for resolving legal blockchain conflicts. The reason is evident: the flexibility, confidentiality, and technological adaptability of arbitration procedures by default. Crypto arbitrations in this context raise specific legal questions for the existing judicial practice, which also have technological implications, namely:

  • How to identify a party in the case of anonymous blockchain addresses?
  • How to determine the applicable law if the contract is executed automatically via smart code?
  • Can an arbitral tribunal order a technological change in the blockchain?
  • How to ensure enforcement of an award in cross-border transfers of crypto assets?

These challenges will be discussed in this article, while it is important to emphasize from the outset the need for a new type of arbitrators—with technological and financial expertise—who can analyze smart contract code, the logic of DeFi protocols, and the digital traces of transactions on the blockchain. The technological expertise of arbitrators will be a key factor in the 21st century, as they must have detailed knowledge of blockchain logic and the specifics of low-level processes (in the code) in crypto asset transactions to render an adequate arbitral award or timely interim measures.

 

2.International Legal Aspects of Arbitration in Crypto Disputes.

Crypto disputes often involve international participants, complex digital contracts, and volatile (electronic) assets. Arbitration, with its transnational applicability and the possibility of electronic proceedings, provides an effective means of protection in such cases, provided the arbitrator has the relevant legal and technological expertise and adequacy.

For this reason, platforms such as Bitcoin.com have increasingly used arbitration under the Electronic Transaction Arbitration Rules of the Hong Kong International Arbitration Centre (HKIAC) for disputes outside the U.S., while Binance applies the rules of the International Chamber of Commerce (ICC). For American blockchain users, JAMS (Judicial Arbitration and Mediation Services) arbitration is used.

Typical cases for blockchain arbitration include:

  • Breach of contract between platforms and users;
  • Fraud involving digital assets;
  • Intellectual property disputes regarding NFTs;
  • Technical errors in blockchain transactions;
  • Unauthorized transfers or loss of crypto wallets.

Arbitration related to crypto assets is developing rapidly on the international stage, with leading jurisdictions demonstrating both flexibility and institutionalized mechanisms for effective dispute resolution. Analyzing practice from Singapore, Switzerland, and the U.S., as well as European law, shows that Bulgaria is lagging both normatively and institutionally, offering important guidance for the development of the national arbitration environment.

 

2.1. Practice in Singapore (SIAC).

Singapore is establishing itself as a key arbitration hub for crypto disputes in Asia, especially in cases related to DeFi protocols. An example in this regard is the case ByBit v. OKX (2023), where the national court issued interim measures (including worldwide freezing orders and proprietary injunctions) directed at crypto addresses and bank accounts before the arbitration considered the merits of the dispute. This demonstrates the adequacy and readiness of Singaporean courts to support blockchain arbitration with interim measures, reducing the risk of asset dispersion or loss.

The practical effect for arbitration is that the national court can approve urgent temporary freezing of assets while the arbitration process is ongoing. Singapore is thus established as a hub for crypto asset disputes in Asia. In numerous cases, parties are adequately supported in seeking court assistance through the imposition of presumed interim measures before national courts to preserve assets or impose temporary freezes on crypto addresses before the arbitration resolves the case on the merits. For instance, in the decision of July 25, 2023 (SGHC 199), the Singapore court granted ByBit several types of interim relief—a worldwide freezing order and a proprietary order regarding funds held in crypto addresses and traditional bank accounts. This demonstrates the readiness of Singaporean courts to apply traditional civil interim measures to crypto assets, thereby supportively and adequately backing arbitration with court jurisdiction, something that, for example, does not occur in Bulgaria due to a lack of judicial knowledge and willingness to integrate technology and intellectual property understanding in the 21st century.

 

2.2. Practice in Switzerland (Swiss Chambers Arbitration Institution, SCAI).

In recent years, Switzerland has positioned itself as a stable arbitration forum for cross-border crypto disputes. Following the development of several cantons (e.g., Lugano and Zug) as genuine crypto destinations—where even taxes, kindergarten fees, or public transport can be paid in crypto—Swiss arbitration institutions and national courts have developed practices confirming that crypto assets have a proprietary character and can be subject to seizure or other adequate interim measures when a local element is present in Switzerland (crypto address, key, or intermediary). This provides not only a location for arbitration as a jurisdiction but also support for enforcing interim measures, enhancing the jurisdiction’s attractiveness for international crypto platforms.

Swiss arbitration institutions (Swiss Arbitration Centre / SCAI) are experiencing growth in international cases and actively positioning themselves as a reliable arbitration jurisdiction for cross-border commercial disputes, including those involving digital assets. Swiss courts also work on the applicability of interim measures to crypto assets—the practice and analyses indicate that, when a local element is present (e.g., holder of a crypto public/private key and/or blockchain address in Switzerland), Swiss courts can order interim actions on crypto addresses, wallets, assets therein, etc. Summaries of positions and trends on the subject are found in updates from the Swiss Arbitration Centre.

In this context, Switzerland confirms the view that the proprietary nature of crypto assets allows securing claims via civil procedural instruments such as attachment, but only under the conditions of applicable national law (especially when keys or entities are in/related to Switzerland). Thus, the Swiss Arbitration Centre and national courts are capable of serving international crypto arbitrations not only as a venue but also as a jurisdiction that can impose enforceable, lawful, predictable, and adequate interim measures when crypto assets are connected to local entities, blockchain addresses (via IP), or intermediaries.

 

2.3. Practice in the U.S. (Coinbase, Anderson v. Binance, JAMS).

In blockchain arbitration, U.S. courts emphasize the validity of arbitration clauses and user notice. Examples include Coinbase Arbitration Clause Litigation and Anderson v. Binance, where courts assessed whether users were adequately informed of arbitration clauses and changes to terms of service in blockchain projects. In a series of cases (including Suski v. Coinbase / Bielski v. Coinbase), the question was whether the court should halt civil proceedings and defer to arbitration. Supreme Court decisions confirmed the enforceability of arbitration clauses in consumer contracts for blockchain business projects under specific procedural conditions, enhancing the ability of companies such as Coinbase to seek arbitration for individual claims and limit class actions concerning general blockchain transaction terms.

The practical effect is that U.S. courts carefully examine when and how an arbitration clause is valid against blockchain users. Conclusions include:

  • Crypto asset arbitration in the U.S. is not procedurally permissible if the user has not received adequate and clear notice of the arbitration clause in the relevant terms of a blockchain project;
  • Platforms must prove the user’s informed consent to a specific arbitration clause, especially when terms are modified affecting arbitration.

A series of U.S. court decisions, including district and appellate courts, reviewed Binance’s attempts to shift blockchain dispute jurisdiction to arbitration under amended user terms, choosing Singapore as the arbitration venue. The overall conclusion is that courts check whether users were effectively notified of new conditions affecting arbitration clauses, and if not, arbitration cannot procedurally proceed in another jurisdiction solely for the convenience of a legal entity. Recent U.S. decisions (2024–2025) show that courts may refuse to send cases to arbitration abroad when a blockchain platform has not transparently notified users of changes to arbitration terms. This is especially significant for crypto exchanges that frequently update their terms of service regarding dispute arbitration and jurisdiction.

These examples demonstrate that U.S. crypto arbitration requires not only clear clauses but also transparent procedures for notification and consent, emphasizing user protection and informed consent. It is evident that U.S. practice imposes informed consent requirements for arbitration clauses in blockchain projects, limiting large platforms’ ability to shift mass consumer claims from court to arbitration, including across jurisdictions, if proper notice is not given[1].

 

2.4. European Law (EU) in Crypto Dispute Arbitration.

Crypto element arbitration in Bulgaria and the EU must be considered through the lens of European legal standards, which are increasingly modern, detailed, and comprehensive. Foundational international legislative acts include:

Firstly, Regulation (EU) 2023/1114 (MiCA), which establishes requirements for transparency, consumer protection, and accountability for crypto-asset service providers. Arbitration must comply with these standards when handling disputes with crypto users. MiCA provides a binding European regulatory framework for many types of crypto assets and requires service providers (CASPs) to adhere to transparency, consumer protection, and accountability rules, meaning arbitration clauses and procedures applied in the EU must comply with information and user protection requirements (registration, white papers, risk transparency, etc.)[2].

Secondly, Regulation (EU) 2022/858 (DLT Pilot Regime) regulates market infrastructures based on DLT[3], providing a legal framework for settlement and tokenization, which arbitration can use as a normative basis for evidence and procedural actions. The pilot DLT rules establish frameworks for testing and regulating DLT-based markets (tokenization, settlement), introducing specific requirements for market infrastructures. For arbitration, this means that when a dispute involves a DLT platform, evidence, access to funds, and settlement issues are considered in the context of these regulations and requirements.

Thirdly, Directive 2013/11/EU (ADR) requires accessible, transparent, and effective alternative dispute resolution mechanisms for consumers, including limitations on excluding consumer rights via arbitration clauses. When crypto platforms provide services to EU users, arbitration awards and clauses must consider user rights regarding collective action, court access, etc. Arbitration rules and practices must align with these principles—for instance, prohibiting total deprivation of rights without clear informed consent, as shown by U.S. court practice.

 

3.Arbitration and Judicial Practice in Crypto Disputes in England.

Although international arbitration institutions have not yet adopted special rules for crypto assets, some jurisdictions are already adapting their law to address the specific challenges associated with digital assets in the 21st century. In 2021, the United Kingdom adopted the Digital Dispute Resolution Rules (DDRR), giving arbitral tribunals authority to interact directly with blockchain networks, including ordering the transfer, cancellation, or seizure of tokens—a pioneering integration between law and technology, allowing arbitration to handle the unique technological aspects of digital assets.

Court practice in England already demonstrates the recognition and interpretation of cryptocurrencies as a form of property. In AA v Persons Unknown [2019] EWHC 3556 (Comm), the court issued a freezing injunction for bitcoins, recognizing cryptocurrency as property under English law. The decision emphasizes the possibility of applying interim measures to protect digital assets before or during arbitration proceedings. The court argued that cryptocurrency has “proprietary value that can be identified and frozen,” creating a legal basis for interim measures supporting arbitration in procedural actions.

In AA v Persons Unknown [2021] EWHC 2209 (Comm), the court allowed blocking crypto assets held in decentralized wallets, noting that “ownership of crypto assets is valid even when the assets are virtual and intangible.” This reinforces that arbitral tribunals can issue effective interim measures even if the assets are not traditional physical property.

Additionally, in AA v Persons Unknown [2022] EWHC 1309 (Comm), the court confirmed that crypto assets are protected against unauthorized transfers and can be subject to proprietary injunctions, directly applicable in arbitrations disputing tokenized assets or smart contracts.

These decisions create a solid legal foundation for arbitration of crypto disputes in the UK, showing that English courts recognize the proprietary nature of digital assets and are prepared to support arbitration with interim measures and injunctions. Combined application of DDRR and court practice provides a model that can inform the development of national arbitration rules and procedures, including in Bulgaria, ensuring efficiency and legal certainty in crypto disputes.

Court practice in England demonstrates how arbitration and judicial bodies can jointly protect parties’ interests in crypto disputes through interim measures, with practical application in several steps:

  • Identification of asset and party. In AA v Persons Unknown (2019), the court allowed plaintiffs to identify digital wallets and addresses in the blockchain network linked to the alleged offender. This is crucial because parties in decentralized assets are often anonymous or identified only via a public address.
  • Request for freezing injunction. After identification, the court issues a temporary injunction to freeze the specific crypto assets, preventing transfer or liquidation during arbitration. Under DDRR or HKIAC rules, this measure is applied by notifying the blockchain platform holding the assets and freezing smart contracts or accounts.
  • Application of arbitral instrument. The arbitral tribunal can order a proprietary injunction, directing the asset holder (e.g., exchange or wallet operator) to freeze or transfer assets according to the arbitral award. In AA v Persons Unknown, the court confirmed that even when assets are virtual and decentralized, a freezing order can effectively protect the claimants’ proprietary rights.
  • Enforcement and monitoring. In international arbitration practice, including under ICC or HKIAC rules, the court may appoint a technical expert to track blockchain transactions to ensure compliance with the award. This provides control over transfers, cancellations, or freezes of tokens until final decision.
  • Prevention of abuse and repeated violations. Interim measures prevent asset dispersion before the final arbitration decision. In Coinbase Arbitration Clause Litigation and Anderson v. Binance (U.S.), such measures were used to freeze cryptocurrencies and tokens while the tribunal considered evidence and determined parties’ rights.

These examples show that interim measures in arbitration are not theoretical but real tools for protecting proprietary interests in crypto arbitration, providing:

  • Identification and freezing of assets;
  • Enforcement of arbitral awards;
  • Legal certainty and prevention of abuse;
  • Effective protection of parties before final resolution.

For Bulgaria, this means that developing arbitration rules for crypto disputes should include procedures for identifying digital assets, securing injunctions, and monitoring through technical experts, enabling arbitration to offer effective protection to participants in the crypto economy, ensuring legal certainty and confidence in awards. Currently, this is not implemented, despite detailed provisions for specific interim measures in intellectual property laws, because Bulgarian courts neither read nor adequately apply them.

 

4.Opportunities for Developing Crypto Arbitration in Bulgaria.

Bulgaria has not yet established a specialized framework for crypto dispute arbitration (similar to domain and trademark disputes), although the regulatory framework allows for it.

Under Art. 19, para. 1 of the CPC and Art. 7 of the International Commercial Arbitration Act (ICAA), all property disputes, including those involving digital assets, may be subject to arbitration.

Due to the lack of specific rules, the Arbitration Court at the Bulgarian Chamber of Commerce and Industry (BCCI) could adopt supplementary rules for digital asset disputes, similar to DDRR, increasing the international competitiveness of Bulgarian arbitration and providing adequate depth in the 21st century. Possible development directions include:

  • Creating a permanent list of arbitrators with technological expertise, including blockchain, fintech, and digital contract specialists within BCCI;
  • Introducing a “technological arbitration module”—a procedure allowing electronic proceedings, blockchain-based evidence, and remote hearings;
  • Adopting specialized rules under ICAA for resolving digital disputes, inspired by British DDRR;
  • Launching pilot programs between arbitration institutions and universities to train crypto dispute experts.

Although Bulgaria currently lacks specialized rules, ICAA and BCCI arbitration practice allow broad application of arbitration to digital asset disputes. Recent BCCI decisions confirm that:

  • Electronic contracts and digital signatures have evidentiary value equivalent to written form (in accordance with Arts. 3 and 13 of the Electronic Document and Electronic Trust Services Act);
  • Arbitration may cover intangible assets if they have proprietary value—a principle confirmed by Supreme Court Decision No. 137/2020 (case 1981/2019), stating that “arbitrability depends on the proprietary nature of the right, not its material form.”

Thus, arbitration clauses in smart contracts are admissible if they reflect valid consent under Arts. 19 CPC and 7 ICAA. Despite the favorable foundation, crypto arbitrations in Bulgaria would challenge the current legal system due to:

  • Procedural difficulties in identifying parties (especially in decentralized structures like DAO);
  • Uncertainties regarding applicable law and jurisdiction, even though tort rules in Bulgaria are clear for international entities;
  • Procedural challenges in enforcing awards when assets are in foreign blockchain networks;
  • Limited or non-existent number of arbitrators with technological competence.

Modernizing Bulgarian arbitration practice is necessary to ensure efficiency and legal certainty in the crypto economy, particularly as stable crypto companies operate in Bulgaria, yet this business segment is largely ignored in legislation and often deemed “risky” by courts and banks, while global practice rapidly advances and blockchain becomes a leading technology in law and finance.

5.1. Proposals for Developing Crypto Arbitration in Bulgaria.

In view of European trends and international practice, including the opinions of prominent Bulgarian scholars in the doctrine[4], Bulgaria can and should in the near future undertake some of the following legislative steps. First, it may be appropriate to adopt specialized arbitration rules for digital assets, based, for example, on the principles of the British DDRR (why reinvent something that already exists), which would allow direct interaction with blockchain.

Second – in my opinion, consideration should be given to establishing a permanent Digital Disputes Committee within the Arbitration Court at the BCCI, composed of lawyers, IT specialists, and financiers, introducing the institution of a “technical expert-arbitrator,” similar to the practice in HKIAC and SIAC, whereby the arbitrator can commission a technical analysis from an external blockchain specialist.

Third – given the realities of the 21st century, I consider it appropriate to introduce the digitalization of the arbitration process – the use of smart contracts[5] for procedural actions, electronic service, and video hearings, while also working on the development of arbitration training through joint programs between law faculties and the Chamber of Arbitrators in Bulgaria for the certification of experts in crypto disputes.

5.2. Arbitrability of Crypto Disputes and Supporting Judicial Practice.
Supreme Court practice supports arbitration autonomy, including in complex commercial relations such as smart contract transactions. For example, Supreme Court Decision No. 66 of 23.03.2021 (case 1601/2020) states that “the court should not intervene in the substance of the arbitration dispute except to verify the regularity of the award.” Decision No. 60069/25.06.2021 (case 306/2021) accepts that electronic contracts do not exclude the validity of arbitration clauses if consent is identifiable via electronic signature or other secure authentication methods. These principles apply to crypto arbitration, where expressions of will occur through smart contracts and digital signatures, reflecting genuine consent under civil and arbitration law.

5.3. Need for Specialized Expertise. Crypto arbitration complexity requires new types of experts—lawyers, IT specialists, financiers, and engineers—familiar with cryptographic protocols, tokenization, and DeFi technologies. Often, arbitrators’ expertise is decisive in evaluating technical evidence and valuing digital assets. Bulgaria’s Chamber of Arbitrators should develop a certification program for digital and crypto arbitration to build trust and professionalism in this emerging legal field of global technological and legal interest.

 

6. Conclusion.

The crypto economy poses new challenges and opportunities for law. Arbitration, with its flexibility and international recognition, is the most suitable mechanism to resolve these disputes. Cryptocurrencies are transforming financial markets and arbitration itself. While international centers like Hong Kong, London, and Singapore hold leading positions, Bulgaria—particularly Sofia—has a real opportunity to become a regional hub for resolving digital asset disputes, especially given growing interest in fintech in Southeast Europe.

For Bulgaria, this represents a technological and legal opportunity to develop and offer a real arbitration framework for digital assets, attracting international disputes through a modern national regulatory framework and the creation of arbitration clauses for a contemporary arbitration system distinguished by technological and electronic robustness, competence[6], and transparency. Within this same arbitration, disputes between trademarks and domains, which currently remain the priority of the legal nonentity — the Arbitration Committee of “Register.bg” Ltd., an illegal structure within the company declared legally illegitimate by the Supreme Court of Cassation in multiple rulings — could also be addressed. Understanding these issues could give Bulgaria a boost to transform the arbitration of blockchain disputes into a strategic tool for its digital economy, creating a model of technologically compatible arbitration based on blockchain for evidence, electronic identity, and traceability of decisions. International practice and European standards indicate several key directions for the development of the Bulgarian arbitration system in crypto disputes:

  • Interim measures and court interaction— introducing procedures for urgent measures, similar to the Singaporean model;
  • Transparent arbitration clauses— clear notification and proof of parties’ consent, aligned with American practice;
  • Regulatory compliance with the EU— integrating MiCA and DLT principles into arbitration rules for consumer protection and evidence management;
  • Technical expertise— establishing a registry of experts in blockchain, DeFi, and smart contracts to support arbitration tribunals;
  • Process modernization— electronic proceedings, use of smart contracts for procedural actions, and remote hearings.

These steps will enable Bulgaria to position itself as a competitive arbitration center for crypto disputes while ensuring consumer protection, transparency, and international comparability. Achieving this requires a vision of the problem, synergy between arbitration institutions, judicial practice, and technological and legal experts in the blockchain field. Arbitration should become a bridge between law and new technologies in Bulgaria, rather than an obstacle, currently based on a lack of knowledge and competence.

 

  

Author:  Мr. Atanas Kostov - attorney at law

 

 

  

[1] Thus, the case Suski v. Coinbase / Bielski v. Coinbase, the decision of which can be read here: https://www.supremecourt.gov/opinions/23pdf/23-3_879d.pdf?utm_source=chatgpt.com

[2] More on the topic: Kostov, A. – “What the European Union Regulation on Markets in Crypto-Assets (MiCA) Provides – The New Legal Framework of the Blockchain Industry,” Property and Law Journal, 2023, Book №11;

[3] See in this regard: Kostov, A. – “The DLT Pilot Regime Regulation Concerning the Blockchain Ecosystem of Public Financial Instruments,” Property and Law Journal, 2024, Book №5;

[4] Thus, Prof. Ognyan Gerdjikov – Arbitration in Bulgaria (2022);

[5] Such views already exist in the Bulgarian legal doctrine – see Assoc. Prof. Krasimir Kanchev – “Electronic Contracts and Arbitration” (Contemporary Law Journal, 2021);

[6] In this context, it should be noted that, for example, legislative changes are currently underway in the CPC and ACA regarding the digitalization of multiple proceedings – receipt of documents, enforcement procedures, participation in hearings via digital and video connection, etc.