February 21, 2023 10:52 pm
Murray Stahl is the co-founder, Chief Executive Officer, and Chairman of the Board of Horizon Kinetics . Before starting his own company, Stahl served 16 years as a senior portfolio manager and research analyst at Bankers Trust Company (1978-1994). He is also the co-portfolio manager of many registered investment companies , funds and accounts, as well as a member of the Board of Directors of the Texas Pacific Land Corporation, the Bermuda Stock Exchange, and the Minneapolis Grain Exchange. Stahl got his MBA from Pace University in 1985. Let’s take a look at the top 10 holdings of Murray Stahl. Top 10 Holdings Of Murray Stahl
We have used the latest available 13F filing (as of Dec. 31, 2022) of Horizon Kinetics to develop this list of the top 10 holdings of Murray Stahl. Here are the top 10 holdings of Murray Stahl:
10. Archer Daniels Midland
Stahl owns over 1 million shares of Archer-Daniels-Midland Co ( NYSE:ADM ) at an estimated average price of $63. These shares have a market value of more than $94 million and account for 1.67% of Stahl’s portfolio. Stahl first took a position in Archer Daniels Midland shares in Q2 2020 and sold a few shares of it in Q4 2022. Archer Daniels Midland shares are down by over 12% year to date, bringing their 3-month return to -14%. 9. Permian Basin Royalty Trust
Stahl owns over 3.74 million shares of Permian Basin Royalty Trust (NYSE:PBT) at an estimated average price of $15.71. These shares have a market value of more than $94 million and account for 1.67% of Stahl’s portfolio. Stahl first took a position in Permian Basin Royalty Trust shares in Q1 2019 and added some shares of it in Q4 2022 as well. Permian Basin Royalty Trust shares are down by almost 5% year to date, bringing their 3-month return to almost 24%. 8. Intercontinental Exchange
Stahl owns over 992K shares of Intercontinental Exchange Inc (NYSE:ICE) at an estimated average price of $103.82. These shares have a market value of more than $101 million and account for 1.8% of Stahl’s portfolio. Stahl first took a position in Intercontinental Exchange shares in Q1 2019 and sold a few shares of it in Q4 2022. Intercontinental Exchange shares are up by over 4% year to date, bringing their 3-month return to almost 3%. 7. Cheniere Energy
Stahl owns over 693K shares of Cheniere Energy , Inc. (NYSEAMERICAN:LNG) at an estimated average price of $78.20. These shares have a market value of more than $104 million and account for 1.84% of Stahl’s portfolio. Stahl first took position in Cheniere Energy shares in Q1 2019, and sold a few shares of it in Q4 2022. Cheniere Energy shares are down by over 3% year to date, bringing their 3-month return to almost -14%. 6. Civeo
Stahl owns over 3.87 million shares of Civeo Corp (NYSE:CVEO) at an estimated average price of $23.15. These shares have a market value of more than $120 million and account for 2.13% of Stahl’s portfolio. Stahl first took a position in Civeo shares in Q1 2021 and added some shares of it in Q4 2022 as well. Civeo shares are up by almost 9% year to date, bringing their 3-month return to over 9%. 5. Grayscale Bitcoin Trust
Stahl owns over 15 million shares of Grayscale Bitcoin Trust (OTCMKTS:GBTC) at an estimated average price of $8.29. These shares have a market value of more than $131 million and account for 2.32% of Stahl’s portfolio. Stahl first took position in Grayscale Bitcoin a Trust shares in Q4 2022. 4. Wheaton Precious Metals
Stahl owns over 3.44 million shares of Wheaton Precious Metals Corp (NYSE:WPM) at an estimated average price of $27.78. These shares have a market value of more than $134 million and account for 2.38% of Stahl’s portfolio. Stahl first took position in Wheaton Precious Metals shares in Q1 2019 and added some shares of it in Q4 2022 as well. Wheaton Precious Metals shares are up by over 8% year to date, bringing their 3-month return to over 14%. 3. CACI International
Stahl owns over 455K shares of CACI International Inc (NYSE:CACI) at an estimated average price of $196.13. These shares have a market value of more than $136 million and account for 2.42% of Stahl’s portfolio. Stahl first took a position in CACI International shares in Q1 2019 and added some shares of it in Q4 2022 as well. CACI International shares are up by over 1% year to date, bringing their 3-month return to almost 1%. 2. Franco-Nevada
Stahl owns over 1 million shares of Franco-Nevada Corp (NYSE:FNV) at an estimated average price of $95.32. These shares have a market value of more than $146 million and account for 2.59% of Stahl’s portfolio. Stahl first took a position in Franco-Nevada shares in Q1 2019 and sold a few shares of it in Q4 2022. Franco-Nevada shares are down by almost 3% year to date, bringing their 3-month return to almost -5%. 1. Texas Pacific Land
Stahl owns over 1.42 million shares of Texas Pacific Land Corp (NYSE:TPL) at an estimated average price of $657.65. These shares have a market value of more than $2.96 billion and account for 52.3% of Stahl’s portfolio. Stahl sold a few shares of Texas Pacific Land in Q4 2022. Texas Pacific Land shares are down by over 23% year to date, bringing their 3-month return to almost -34%. This article originally appeared on ValueWalk
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These Are the Top 10 Holdings of Murray Stahl

ValueWalk
Murray Stahl is the co-founder, Chief Executive Officer, and Chairman of the Board of Horizon Kinetics . Before starting his own company, Stahl served 16 years as a senior portfolio manager and research analyst at Bankers Trust Company (1978-1994). He is also the co-portfolio manager of many registered investment companies , funds and accounts, as well as a member of the Board of Directors of the Texas Pacific Land Corporation, the Bermuda Stock Exchange, and the Minneapolis Grain Exchange. Stahl got his MBA from Pace University in 1985. Let’s take a look at the top 10 holdings of Murray Stahl. Get The Full Series in PDF
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Top 10 Holdings Of Murray Stahl
We have used the latest available 13F filing (as of Dec. 31, 2022) of Horizon Kinetics to develop this list of the top 10 holdings of Murray Stahl. Here are the top 10 holdings of Murray Stahl:
Archer Daniels Midland
Stahl owns over 1 million shares of Archer-Daniels-Midland Co ( NYSE:ADM ) at an estimated average price of $63. These shares have a market value of more than $94 million and account for 1.67% of Stahl’s portfolio. Stahl first took a position in Archer Daniels Midland shares in Q2 2020 and sold a few shares of it in Q4 2022. Archer Daniels Midland shares are down by over 12% year to date, bringing their 3-month return to -14%. Permian Basin Royalty Trust
Stahl owns over 3.74 million shares of Permian Basin Royalty Trust (NYSE:PBT) at an estimated average price of $15.71. These shares have a market value of more than $94 million and account for 1.67% of Stahl’s portfolio. Stahl first took a position in Permian Basin Royalty Trust shares in Q1 2019 and added some shares of it in Q4 2022 as well. Permian Basin Royalty Trust shares are down by almost 5% year to date, bringing their 3-month return to almost 24%. Intercontinental Exchange
Stahl owns over 992K shares of Intercontinental Exchange Inc (NYSE:ICE) at an estimated average price of $103.82. These shares have a market value of more than $101 million and account for 1.8% of Stahl’s portfolio. Stahl first took a position in Intercontinental Exchange shares in Q1 2019 and sold a few shares of it in Q4 2022. Intercontinental Exchange shares are up by over 4% year to date, bringing their 3-month return to almost 3%. Cheniere Energy
Stahl owns over 693K shares of Cheniere Energy , Inc. (NYSEAMERICAN:LNG) at an estimated average price of $78.20. These shares have a market value of more than $104 million and account for 1.84% of Stahl’s portfolio. Stahl first took position in Cheniere Energy shares in Q1 2019, and sold a few shares of it in Q4 2022. Cheniere Energy shares are down by over 3% year to date, bringing their 3-month return to almost -14%. Civeo
Stahl owns over 3.87 million shares of Civeo Corp (NYSE:CVEO) at an estimated average price of $23.15. These shares have a market value of more than $120 million and account for 2.13% of Stahl’s portfolio. Stahl first took a position in Civeo shares in Q1 2021 and added some shares of it in Q4 2022 as well. Civeo shares are up by almost 9% year to date, bringing their 3-month return to over 9%. Grayscale Bitcoin Trust
Stahl owns over 15 million shares of Grayscale Bitcoin Trust (OTCMKTS:GBTC) at an estimated average price of $8.29. These shares have a market value of more than $131 million and account for 2.32% of Stahl’s portfolio. Stahl first took position in Grayscale Bitcoin a Trust shares in Q4 2022. Wheaton Precious Metals
Stahl owns over 3.44 million shares of Wheaton Precious Metals Corp (NYSE:WPM) at an estimated average price of $27.78. These shares have a market value of more than $134 million and account for 2.38% of Stahl’s portfolio. Stahl first took position in Wheaton Precious Metals shares in Q1 2019 and added some shares of it in Q4 2022 as well. Wheaton Precious Metals shares are up by over 8% year to date, bringing their 3-month return to over 14%. CACI International
Stahl owns over 455K shares of CACI International Inc (NYSE:CACI) at an estimated average price of $196.13. These shares have a market value of more than $136 million and account for 2.42% of Stahl’s portfolio. Stahl first took a position in CACI International shares in Q1 2019 and added some shares of it in Q4 2022 as well. CACI International shares are up by over 1% year to date, bringing their 3-month return to almost 1%. Franco-Nevada
Stahl owns over 1 million shares of Franco-Nevada Corp (NYSE:FNV) at an estimated average price of $95.32. These shares have a market value of more than $146 million and account for 2.59% of Stahl’s portfolio. Stahl first took a position in Franco-Nevada shares in Q1 2019 and sold a few shares of it in Q4 2022. Franco-Nevada shares are down by almost 3% year to date, bringing their 3-month return to almost -5%. Texas Pacific Land
Stahl owns over 1.42 million shares of Texas Pacific Land Corp (NYSE:TPL) at an estimated average price of $657.65. These shares have a market value of more than $2.96 billion and account for 52.3% of Stahl’s portfolio. Stahl sold a few shares of Texas Pacific Land in Q4 2022. Texas Pacific Land shares are down by over 23% year to date, bringing their 3-month return to almost -34%.

These Are The Top 10 Holdings Of Murray Stahl

02/06/2023 | 04:10pm EST
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Director Michelle Gloeckler named Interim President and Chief Executive Officer
Matthew Rubel appointed Executive Chairman
Graham Clempson appointed as a new Director
Company provides preliminary fourth quarter and full year 2022 results
Holley Inc. (NYSE: HLLY), the leading platform serving performance automotive enthusiasts, today announced that Tom Tomlinson will retire as President and Chief Executive Officer (“CEO”) and resign from the Board. The Board has appointed current Director, Michelle Gloeckler, as Interim President and CEO while it conducts a comprehensive search process to identify a permanent CEO. The search will be conducted with the assistance of Heidrick & Struggles, who was retained by the Board in September 2022 for a comprehensive review of succession planning. Ms. Gloeckler has been a member of the Board since July 2021 and has over 30 years of experience in consumer-packaged goods, merchandising, sourcing, manufacturing and strategy. In addition, Matthew Rubel, the Company’s current Chairman of the Board, was designated and appointed Executive Chairman of the Board, and expects to serve in such role until a permanent CEO has been selected. Further, Graham Clempson, an observer on the Board since the Company’s business combination with Empower Ltd. in July 2021, was appointed to serve as a member of the Board, effective immediately. Mr. Clempson will serve as the Chair and member of the Compensation and Talent Committee and as a member of the Audit Committee. Anita Sehgal, who joined the Board in May of 2022, will become the Chair of the Nominating and Governance Committee. “The Board thanks Tom for his many contributions and leadership during his twelve years as CEO and nearly twenty years at Holley,” said Mr. Rubel. “Tom’s commitment to the business and passion for automotive enthusiasts have helped grow Holley into a recognized leader in the growing enthusiast market with a solid foundation for future growth. We wish Tom well in his future endeavors.”
Mr. Rubel continued, “Holley has an industry leading position in high performance aftermarket products for car and truck enthusiasts, and we are well positioned to execute on our vision of enabling them in their automotive journeys. We are fortunate to have Michelle lead Holley while the Board conducts the search for a permanent CEO. She has a demonstrated ability to connect with customers, drive growth and build teams in consumer portfolio businesses that will serve Holley well.”
Ms. Gloeckler said, “I have tremendous respect for the Holley team and their commitment to our customers. I look forward to working closely with the Board and Holley’s Executive Leadership team to lead the Company and execute on the strategic vision.”
“It has been an honor to lead Holley since 2009 and I would like to thank all of our employees for their commitment and service to the Company,” said Tomlinson. “We have accomplished a great deal together, and I believe this team will continue to drive strong long-term growth well into the future.”
Preliminary Fourth Quarter and Full Year 2022 Results
While the Company is still conducting its financial closing procedures for the quarter and year ended on December 31, 2022, and the audit by the independent auditor is still underway, the Company today announced preliminary results for the 13-week period and full year ended December 31, 2022. Fourth Quarter Highlights vs. Prior Year Period
Preliminary Net Sales of $153-$155 million compared to $180 million in the fourth quarter 2021
Preliminary Gross Profit of $46-$48 million compared to $75 million in the fourth quarter of 2021
Preliminary Net Loss of $19-$17 million compared to a Net Loss of $18 million in the fourth quarter of 2021
Preliminary Adjusted EBITDA1 of $13 to $15 million, compared to $36 million in the fourth quarter of 2021
Full Year 2022 Highlights vs. Prior Year Period
Preliminary Net Sales of $687-$689 million, compared to $693 million in 2021
Preliminary Gross Profit of $253-$255 million, compared to $287 million in 2021
Preliminary Net Income of $70-$72 million, compared to a Net Loss of $27 million in 2021
Preliminary Adjusted EBITDA1 range of $113 to $115 million, compared to $169 million in 2021
1See “Use and Reconciliation of Non-GAAP Financial Measures” below. “We are making the necessary changes to return Holley to profitable growth, including adding a highly experienced Interim Chief Operating Officer in December 2022, Brian Appelgate, who is leading our cost reduction initiatives,” said Interim President and CEO Michelle Gloeckler. “The entire Holley team is committed to delivering on the Holley Strategic Vision – to inspire and enable enthusiasts in their automotive adventures while bringing innovation, discovery, and fun to motor life.”
“Holley’s results for the fourth quarter and full year 2022 were below our expectations,” said Chief Financial Officer, Jesse Weaver. “Ongoing supply chain challenges and normalization of consumer demand to pre-covid levels reduced sales in the second half of 2022. Adjusted EBITDA results were disappointing, as continued deleveraging of fixed cost, inflation, and manufacturing challenges from the unpredictable supply chain significantly impacted our profitability. While we reduced our past-due orders by over 25% in the fourth quarter, the improvement came in product categories outside of electronics, which has been a key growth area for the Company in recent years.”
Mr. Weaver continued, “As Holley executed its acquisition growth strategy in recent years, the Company underwent a significant transformation. In the last three years, we’ve closed 16 acquisitions, integrated 13 ERP systems and consolidated more than 160,000 square feet across 10 locations. To fully maximize the value of these transactions and position the Company for the next wave of growth, our focus in 2023 will be accelerating deal synergy capture and improving free cash flow across the Company through a combination of realigning teams to key strategic focus areas, streamlining operations, and working with vendors to bring cost back in line. Furthermore, targeted cost and inventory management efforts aim to improve profitability and support debt reduction, while a recently implemented interest rate collar should help to minimize the effects of rising interest rates on the Company. We are actively engaged in discussions with our lenders to ensure maximum flexibility as we execute these plans.”
Mr. Weaver continued, “We intend to provide our initial 2023 financial guidance on our upcoming fourth quarter 2022 earnings call in early March, and we will include more detail around these efforts and their expected impact during the call.”
Michelle Gloeckler Biography
Ms. Gloeckler, 56, has served as a member of the Board since July 2021, and, prior to her appointment as Interim Chief Executive Officer, she served as the Chair of each of the Board’s Compensation and Talent Committee and Nominating and Governance Committee. Ms. Gloeckler is a former retail executive with more than thirty years of experience in retail, consumer-packaged goods, merchandising, sourcing, manufacturing and strategy. In December 2021, Ms. Gloeckler was appointed as an independent member of the Board of Directors of Pairwise. Ms. Gloeckler has been a member of the board of directors of BJ’s Wholesale Club (NYSE: BJ) since September 2019, where she serves on the nominating and governance committee. In May 2021, Ms. Gloeckler was appointed as a member of the Board of Directors of The Duckhorn Portfolio, Inc. (NYSE: NAPA), where she serves on the audit committee and nominating and corporate governance committee. Ms. Gloeckler served as an independent director on Benson Hill Biosystems, Inc.’s board and audit committee from 2019 to 2021, and was the Chief Merchant & President International for Academy Sports & Outdoors (NASDAQ:ASO), a sporting goods retailer, from August 2016 to January 2019. Ms. Gloeckler was an executive at Walmart Inc. (NYSE: WMT), from 2009 to 2016, where she held various executive roles. Most recently she served as Executive Vice President, Consumables, Health and Wellness, and led their US manufacturing initiative. Prior to that, Ms. Gloeckler held leadership roles at The Hershey Company, a global confectionary manufacturer, for more than 20 years. Ms. Gloeckler served on The University of Michigan Dean’s Advisory Council from 2015 to 2022. She holds a bachelor’s degree in Communication and Psychology from the University of Michigan. Matthew Rubel Biography
Mr. Rubel has been the Company’s non-executive Chairman of the Board since its business combination with Empower Ltd. (“Empower”) in July 2021. Prior to the business combination, Mr. Rubel served as Empower’s Chief Executive Officer and Chairman since August 2020. Mr. Rubel has served as the Chairman of MidOcean Partners’ (“MidOcean”) Executive Board since joining the firm in 2018, where he leads the Executive Board’s efforts to provide industry insights to MidOcean Partners’ investment teams and portfolio companies. Mr. Rubel is a renowned retail and brand Chief Executive Officer, having led many successful global brands and businesses. Most recently, Mr. Rubel served as Chief Executive Officer, President, and Board Member of Varsity Brands, a leader in sport, spirit and achievement products, which he strategically focused and integrated. Previously, Mr. Rubel served as Chairman, Chief Executive Officer and President of Collective Brands, Inc., which included Payless ShoeSource, Sperry Topsider, Saucony, Stride Rite and Keds. Prior to Collective Brands, Mr. Rubel was Chairman, Chief Executive Officer and President of Cole Haan LLC, from 1999 to 2005. Prior to Cole Haan, he served in senior management roles at J. Crew Group, Revlon and Murjani International Ltd. Mr. Rubel holds a Bachelor of Science from Ohio University and an MBA from the University of Miami. Graham Clempson Biography
Mr. Clempson has been an observer on the Board since its business combination with Empower in July 2021. Prior to the business combination, Mr. Clempson served as Empower’s President and was a member of Empower’s Board of Directors. He is Vice Chairman of MidOcean, which he co-founded in 2003, and serves on MidOcean’s Executive Board with a focus on the firm’s Investment Strategy, Portfolio Management and Business Development functions based in New York. Previously, Mr. Clempson was MidOcean’s European Managing Partner, based in London, from the firm’s inception until 2012. In addition to his role at MidOcean, Mr. Clempson serves as Managing Partner at Quartic Capital LLP, which he founded in 2012. Quartic Capital LLP invests in and manages complex portfolios of secondary private equity assets, in partnership with Coller Capital, a leading global secondary private equity investment firm. Prior to co-founding MidOcean, Mr. Clempson held various leadership positions in the European finance and private equity sectors, including CEO of Morgan Grenfell Private Equity, European Managing Partner of Deutsche Bank Capital Partners, and Co-Head of European Investment Banking at Deutsche Bank, with particular responsibility for the bank’s Financial Sponsor Coverage, Leveraged Finance and High Yield departments. Mr. Clempson began his career at Bankers Trust Company in 1983. Anita Sehgal Biography
Ms. Sehgal has served as Senior Vice President, Marketing & Communications with the Houston Astros, a Major League Baseball team, since 2015. In her role, Ms. Sehgal provides strategic leadership for the ballclub’s retail, advertising, marketing, communications, broadcasting, and alumni relations, including support for a broad variety of sponsorship, ticket, special event, community, and the Astros Golf Foundation and Houston Open initiatives. Prior to joining the Houston Astros, Ms. Sehgal spent over 20 years in various strategic marketing functions with several organizations, including FGL Sports, Best Buy and most recently Academy Sports + Outdoors. Ms. Sehgal received a Bachelor of Business Administration degree, with a focus in marketing and human resources, from the University of Regina. Ms. Sehgal currently serves as an independent board director for Reitmans Canada Ltée and Escalade Inc.
About Holley Inc.
Holley Inc. (NYSE: HLLY) is a leading designer, marketer, and manufacturer of high-performance products for car and truck enthusiasts. Holley offers the largest portfolio of iconic brands that deliver innovation and inspiration to a large and diverse community of millions of avid automotive enthusiasts who are passionate about the performance and personalization of their classic and modern cars. Holley has disrupted the performance category by putting the enthusiast consumer first, developing innovative new products, and building a robust M&A process that has added meaningful scale and diversity to its platform. For more information on Holley, visit https://www.holley.com . Forward-Looking Statements
Certain statements in this press release may be considered “forward-looking statements” within the meaning of the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements generally relate to future events or Holley’s future financial or operating performance. For example, projections of future revenue and adjusted EBITDA and other metrics are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “expect,” “intend,” “will,” “estimate,” “anticipate,” “believe,” “predict,” “or” or the negatives of these terms or variations of them or similar terminology. Such forward-looking statements are subject to risks, uncertainties, and other factors which could cause actual results to differ materially from those expressed or implied by such forward-looking statements. These forward-looking statements are based upon estimates and assumptions that, while considered reasonable by Holley and its management, are inherently uncertain. Factors that may cause actual results to differ materially from current expectations include, but are not limited to: 1) the ability to recognize the anticipated benefits of the business combination with Empower LTD, which may be affected by, among other things, competition, the ability of the combined company to grow and manage growth profitably, maintain relationships with customers and suppliers and retain its management and key employees; 2) costs related to the business combination and Holley becoming a public company; 3) disruptions to Holley's operations, including as a result of cybersecurity incidents; 4) changes in applicable laws or regulations; 5) the outcome of any legal proceedings that may be instituted against Holley; 6) general economic and political conditions, including political tensions and war (such as the ongoing conflict in Ukraine); 7) the possibility that Holley may be adversely affected by other economic, business and/or competitive factors; 8) Holley’s estimates of its financial performance; 9) the impact of the novel coronavirus disease pandemic and its effect on business and financial conditions; 10) our ability to anticipate and manage through disruptions and higher costs in manufacturing, supply chain, logistical operations, and shortages of certain company products in distribution channels; and 11) other risks and uncertainties set forth in the section entitled “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements” in the Annual Report on Form 10-K for the year ended December 31, 2021 filed with the U.S. Securities and Exchange Commission (“SEC”) on March 15, 2022, and that are otherwise described or updated from time to time in Holley’s filings with the SEC. Although Holley believes the expectations reflected in the forward-looking statements are reasonable, nothing in this press release should be regarded as a representation by any person that the forward-looking statements or projections set forth herein will be achieved or that any of the contemplated results of such forward looking statements or projections will be achieved. There may be additional risks that Holley presently does not know or that Holley currently believes are immaterial that could also cause actual results to differ from those contained in the forward-looking statements. You should not place undue reliance on forward-looking statements, which speak only as of the date they are made. Holley undertakes any duty to update these forward-looking statements, except as otherwise required by law. Non-GAAP Financial Measures
Holley believes EBITDA and Adjusted EBITDA are useful to investors in evaluating the Company’s financial performance. In addition, Holley uses these measures internally to establish forecasts, budgets and operational goals to manage and monitor its business. Holley believes that these non-GAAP financial measures help to depict a more realistic representation of the performance of the underlying business, enabling the Company to evaluate and plan more effectively for the future. HOLLEY INC. and SUBSIDIARIES

Holley Announces Chief Executive Officer Transition and Preliminary Fourth Quarter and Full Year 2022 Results

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As part of our series looking at the potential impact of recent cases on the future decisions of the Cayman Islands, BVI and Bermuda Courts relating to crypto assets, we consider the English decision of  LMN v Bitflyer Holdings Inc and others [2022] EWHC 2954 (Comm) , and specifically whether victims of cryptocurrency fraud are able to obtain Bankers Trust orders compelling cryptocurrency exchanges to disclose confidential information to help recover misappropriated cryptocurrency. The applicant in LMN v Bitflyer and others  was a cryptocurrency exchange (the "Applicant") which fell victim to a hack where millions of dollars-worth of cryptocurrency was stolen. In preparing to commence proceedings to recover the cryptocurrency, the Applicant instructed an expert to trace the stolen cryptocurrency. The expert was able to track the initial dissipation from the Applicant as such transactions stemmed from 'Hot Wallets' (i.e. wallets connected to the internet) and transfers were therefore recorded on the relevant cryptocurrency's blockchains. However, when the cryptocurrency was transferred to an address / wallet maintained by a cryptocurrency exchange, this complicated the tracing exercise since the crediting of cryptocurrency to the customer's account maintained by the exchange takes place "off-chain" (i.e. via an internal accounting exercise where such cryptocurrency is commingled in an 'omnibus wallet' used to service many customers). The misappropriated cryptocurrency processed by exchanges was therefore rendered untraceable making it necessary for the Applicant to seek information from the relevant exchanges in order to continue the tracing exercise and determine who was behind the relevant transactions. In this instance, the Court considered that the test to obtain a Bankers Trust order was satisfied, namely that:
the misappropriated cryptocurrency about which information was sought belonged to the Applicant, as the Court found that there was a good arguable case that whoever held the cryptocurrency or traceable substitutes did so as a constructive trustee for the Applicant;
there was a real prospect that the information sought would lead to the location or preservation of assets, as the information sought concerned the identity of the account holders associated with the transfer of the misappropriated cryptocurrency and the destination of the transfers; and
the interest of the Applicant in obtaining the order outweighed any possible detriment to the exchanges in complying with the order, as the Applicant provided undertakings as to expenses and damages and restrictions were put in place on collateral use of any information disclosed. The Courts in the Cayman Islands, BVI and Bermuda have followed the English Courts in making Bankers Trust orders and we think it likely that they will be similarly willing to assist victims of theft and fraud in a crypto context where victims seek information to aid recovery of misappropriated crypto assets. Further, this decision affirms previous decisions which classify cryptocurrency as property and therefore subject to proprietary remedies and, crucially, serves as a timely reminder to cryptocurrency exchanges to ensure they comply with applicable KYC requirements given they may be compelled to produce such information where doing so assists the recovery of misappropriated crypto assets. If they are unable to comply with such orders, there would need to be a very good reason to avoid being in contempt of Court

Information orders against exchanges to aid the recovery of misappropriated cryptocurrency

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The High Court has once again grappled with novel issues raised by disputes concerning cryptoassets, this time in the context of an interim application for information orders. [1]
The claimant (“LMN”), a company incorporated in England and Wales and operator of a cryptocurrency exchange, allegedly lost millions of dollars’ worth of cryptocurrency during an attack by hackers. After conducting a comprehensive tracing exercise, LMN discovered some funds had passed to or through wallets owned and operated by the defendant cryptocurrency exchanges. The consequence of this were twofold:
Such addresses generally held pooled assets from numerous customers. Assets were only attributed to customers “off-chain” (that is, on private internal databases). As such, once assets reached an exchange address, they could not be traced further without additional information from the relevant exchange. Each of the defendant exchanges was understood to carry out regulatory due diligence on their customers, such that they knew the identity of the persons who controlled the accounts receiving the relevant assets. Having had little success pursuing for over two years the alleged wrongdoers with the assistance of U.K. criminal agencies, LMN brought an application in the Commercial Court against the defendant exchanges seeking information orders with a view to commencing proceedings for recovery of the alleged misappropriated cryptoassets. LMN also sought permission to serve the application on the defendants outside of the jurisdiction. The English Court may grant an order requiring third parties to disclose certain information under its so-called Norwich Pharmacal and Bankers Trust jurisdictions. Norwich Pharmacal orders require disclosure from a third party who is alleged to be innocently “mixed up” in wrongdoing and has information which would enable the claimant to identify the wrongdoer. Bankers Trust orders require disclosure from third parties of information (including otherwise confidential customer information) which may enable the claimant to establish the whereabouts of its misappropriated assets and/or prevent the disposal of such assets. The case again highlights the English Court’s willingness to apply English procedural mechanisms (in this case, in relation to service and pre-action information gathering) to novel situations thrown up by cryptocurrency fraud. In particular, it indicates that the decentralised, cross-border nature of cryptocurrencies and their misappropriation can justify the “exceptional” use of the Bankers Trust and/or Norwich Pharmacal jurisdictions to obtain information about misappropriated cryptocurrency from foreign defendants to aid the recovery of such assets. It also shows the utility of the newly introduced information gateway in the English Court’s Practice Direction 6B for overcoming the jurisdictional issues which had historically been a barrier to seeking information orders against parties in other jurisdictions and/or persons unknown, both of which are common features of cryptocurrency disputes. Service Out
The English courts exercise jurisdiction over parties on whom proceedings are properly served, and claimants must therefore generally seek the Court’s permission before serving a claim on parties outside the U.K. (which is colloquially known as “service out”). Considering LMN’s application for such permission in this case, the Court noted that LMN had to show that (a) there was a good arguable case on the merits, (b) the claim fell within one of the “jurisdictional gateways” under Practice Direction 6B 3.1 and (c) England and Wales was the appropriate forum for the claim. Good Arguable Case
There was a good arguable case that the relevant assets were, at the time of the hack,
“located” in England and Wales, being the place where LMN was resident and carried on business. That was so notwithstanding that the servers on which the assets were technically located were in Romania—something the court described as merely an “adventitious circumstance.”
There was therefore a good arguable case that the alleged damage occurred within the jurisdiction, either because it was in England that the assets were taken or because LMN, as an English company, suffered loss and damage within England. Applying the Rome II Regulation, the Court therefore proceeded on the basis that English law applied to the dispute. Therefore, considering each of the relevant requirements for Banker’s Trust relief, the Court found, amongst other things, that:
There were good grounds for concluding that the assets belonged to LMN;
There was a real prospect that the information sought would lead to the location or preservation of such assets; and
The interests of LMN in obtaining the information were not outweighed by the possible detriment to the defendants in complying with the order. As to the first of these requirements in particular, there was a good arguable case that:
Cryptocurrencies are a form of property, relying on the position adopted in AA v. Persons Unknown[2] and the Legal Statement of the U.K. Jurisdiction Task Force. When cryptocurrency was obtained by fraud, equity imposed a constructive trust on the assets. This had been the case in relation to other forms of intangible property even though they were neither things in possession nor things in action. [3]
While there was an argument that each transfer of cryptocurrency on the blockchain created a new asset in the hands of the acquirer, this did not prevent cryptocurrencies from being the subject of tracing (on the basis that there was a relevant substitution). The Court further considered that as there was no doubt the defendants were “mixed up” in the alleged fraud (though not suspected of actual wrongdoing themselves) and, having satisfied the requirements for Bankers Trust relief, there was also a good arguable case that Norwich Pharmacal relief should also be granted. Relevant Gateway
The Court held that the claim “clearly” fell within new gateway (25), which applies to claims for disclosure of information concerning the true identity of a defendant and/or what has become of relevant assets. The gateway, introduced this year, only applies where the information is sought for the purposes of English proceedings which can be served in the jurisdiction or which the claimant would be able to serve out of the jurisdiction. In this regard, however, the Court accepted there was a good arguable case that any subsequent claim against the hackers would fall within gateways (11) (concerning claims about property within the jurisdiction) and/or (15) (concerning claims about constructive trusts). Proper Forum
The Court concluded that England and Wales did appear to be the proper forum for the action, listing a number of relevant factors, namely: LMN is an English company, there were good grounds for considering the location of the assets to be in England, relevant documents were in England and the law of England and Wales at least arguably governed LMN’s proprietary claim. Information Orders
The Court noted that there was an argument that information orders against foreign parties constituted an infringement of the sovereignty of the relevant foreign jurisdiction, and should therefore be granted only in exceptional circumstances. However, the Court questioned the strength of this argument where the actual location of the relevant documents was unknown and (to the extent they were electronic), largely irrelevant. The claim concerned fraud and the pursuit of assets, so it was “exceptional” in any case. As the defendants raised no other substantive objections to the ordering of Bankers Trust relief, and given there was a good arguable claim for such relief (in the context of service out), the Court was satisfied that the Claimant had a good claim for Bankers Trust relief and granted the information orders sought by the Claimant. Comment
LMN v. Bitflyer indicates that the English courts may generally take a sympathetic view of claimants seeking to recover misappropriated cryptoassets, including through the granting of information orders. It also suggests that the courts are taking an increasingly consistent approach to certain issues arising from such assets. It reaffirms, for example, that cryptocurrencies are a form of property. The Court’s powers to grant service out of the jurisdiction, including on persons unknown, and orders requiring pre-action disclosure of confidential information by third parties are particularly important tools in a crypto context, given the wrongdoer’s ability to go “off-chain” by transferring assets through an exchange. The confidential nature of the assets concerned also means that such exchanges may be one of the only means available to claimants of identifying those who carried out any fraud. For these reasons, we can probably expect to see greater use of this powerful remedy in similar cases in future. It is noteworthy that when determining the location of cryptoassets, the Court considered the domicile of the assets’ owner to be far more significant than the location of the servers on which they were technically represented. This is consistent with other recent English cryptoasset caselaw and may be significant in establishing a trend for determining the lex situs of particular assets in future cases. The Court left open a number of questions, including:
Whether LMN was correct that cryptocurrency exchanges held assets in their own name (rather than on trust for their customers) and simply owed a personal obligation to repay relevant amounts to each customer (in a manner analogous to bank deposits). This is a question that has much broader implications for practitioners in other contexts, such as insolvency, but the court did not address whether LMN’s position was correct. The basis on which it considered the defendants to be “mixed up” in the fraud, for the purposes of Norwich Pharmacal relief (i.e., whether this was a consequence of their role as exchanges, as operators of the relevant wallets, or both). This may have implications for the circumstances in which Norwich Pharmacal and Bankers Trust relief may be available as against other entities operating in the cryptocurrency market in future. Finally, information orders had historically faced challenges when parties needed to seek permission to serve out of the jurisdiction. However, the decision shows the efficacy of the new informational gateway, which was introduced in October 2022, and should make it easier for putative claimants to secure orders against parties outside the U.K. and parties unknown, as is often necessary in cryptocurrency cases. Footnotes

Show me the Cryptocurrency: English High Court Grants Novel Information Orders Against Crypto Exchanges

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