Digital Asset Exchange Limited - [2025] NZHC 2003

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE

CIV-2024-485-404 [2025] NZHC 2003

UNDERPart 19 of the High Court Rules and Part 16 of the Companies Act 1993

IN THE MATTER OF Digital Asset Exchange Limited
(in liquidation)

ANDan application by David Ian Ruscoe and Malcolm Russell Moore of Grant Thornton New Zealand Limited
Applicants

Hearing: 14 July 2025

Counsel:S C D A Gollin, A E Simkiss and H Malik for Applicants J S Cooper KC, Amicus Curiae (via AVL)

Judgment: 18 July 2025

JUDGMENT OF GENDALL J

Introduction

[1] The applicant, Digital Asset Exchange Limited (Dasset or the Company), a cryptocurrency exchange company, was placed into liquidation on 14 August 2023 by special resolution of the Company’s shareholders.

[2] The applicants David Ian Ruscoe and Malcolm Russell Moore (together the Liquidators) were appointed as Liquidators of the Company.

[3] Dasset was incorporated in April 2017 following which it offered an online platform or exchange to New Zealand users (Account Holders) which they could

RUSCOE (DIGITAL ASSET EXCHANGE LIMITED) [2025] NZHC 2003 [18 July 2025]

utilise to buy and sell cryptocurrencies (Digital Assets or cryptocurrency) in New Zealand Dollars. The Company charged fees for use of its services.

[4] In carrying out activity with Dasset, Account Holders could fund this by depositing either cryptocurrency or New Zealand Dollars, but most Account Holders traded on Dasset’s platform using New Zealand Dollar deposits. These were paid into a bank account the Company had set up for this purpose known as the ‘Dasset Custodial Bank Account’. All funds which were deposited by Account Holders to the Custodial Bank Account were co-mingled and held together in one pool.

[5] Dasset did not operate its own wallet or exchange infrastructure. Instead, it relied on other cryptocurrency service providers, mainly Bittrex, for this purpose. As a result, Dasset did not itself hold any of its own or Account Holders’ cryptocurrency. Rather, Dasset contracted with Bittrex which operated a cryptocurrency exchange and provided a “Master Account” that recorded all the cryptocurrency purchased by Dasset or deposited by the various Account Holders.

[6] This Master Account had a master key which allowed Dasset to control all activity of Dasset and Account Holders on the Bittrex exchange. In this regard, the Liquidators understood that only Stephen Macaskill (Mr Macaskill), Dasset’s CEO and Director, had access to the master key.

[7] Although Dasset had told Account Holders that it would act in accordance with their individual instructions when carrying out transactions on the exchange, using both fiat currency (New Zealand Dollars in the Custodial Bank Account) and cryptocurrency, those Account Holders did not have individual accounts (for fiat currency) or wallets (for cryptocurrency) of any kind. This was in spite of Account Holders being informed that their individual accounts were linked to both their:

(a)Legal Tender Account, being a digital account represented by amounts deposited and withdrawn from the Custodial Bank Account; and

(b)Digital Currency Wallet, being where their cryptocurrency was…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

AGLC: Digital Asset Exchange Limited [2025] NZHC 2003
Case: [2025] NZHC 2003
Decision Date: 18 July 2025

CaseChat Overview and Summary

This case involved Digital Asset Exchange Limited (Dasset), a cryptocurrency exchange company placed into liquidation. The Liquidators of Dasset, David Ian Ruscoe and Malcolm Russell Moore, sought directions from the Court to assist in the liquidation. The key issues were whether the Digital Assets were held on trust by the Liquidators for Account Holders, how they should be distributed, and whether the Liquidators could convert the Digital Assets into fiat currency. The Court found that the Digital Assets were held on trust by the Liquidators for Account Holders, and should be distributed pari passu. The Court also found it was appropriate to convert the Digital Assets into fiat currency to cover the Liquidators' costs and distribute the proceeds among the Account Holders. The Court declined to exempt the Liquidators from applying the Anti-Money Laundering and Countering Financing of Terrorism Act 2008 to the distribution of the proceeds. The Court granted the directions sought by the Liquidators, with some modifications.

Orders