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The steady expansion of disputes involving digital assets and cryptoassets has accelerated a broader shift in how such disputes are resolved. Alongside the continued growth of arbitration across commercial sectors, arbitration is increasingly emerging as a preferred forum for disputes arising from cryptocurrency trading, custody arrangements, token issuance, decentralised finance (DeFi) protocols, and blockchain-based projects.
This trend reflects both the structural characteristics of digital asset disputes and a series of recent regulatory and procedural developments that have made arbitration better suited to addressing them. As outlined below, changes to arbitration rules, evolving regulatory frameworks, and the increasing contractualisation of crypto relationships — including smart contracts — are reshaping the dispute resolution landscape.
Digital asset disputes: a growing and distinct category
Digital asset disputes now arise across a wide range of factual and legal contexts, including:
- exchange outages, hacks, and asset freezes
- custody and safekeeping failures
- disputes over token sales, SAFTs, and vesting mechanics
- governance disputes within decentralised autonomous organisations (DAOs)
- disagreements over the operation or interpretation of smart contracts.
These disputes are frequently cross-border, technologically complex, and time-sensitive. Assets may be transferred instantaneously, parties may be pseudonymous or dispersed across jurisdictions, and governing law or forum provisions may be unclear or contested. Traditional court litigation can struggle to accommodate these features efficiently, prompting parties to look increasingly to arbitration.
Why arbitration is gaining ground in crypto and digital asset disputes
1. 1. Jurisdictional anchor
Disputes involving digital assets frequently give rise to significant jurisdictional uncertainty. Parties may be based in multiple jurisdictions, transact through decentralised or platform-based structures, and deal in assets that lack a clear geographical situs, making it difficult to identify a natural forum for litigation. While the choice to arbitrate does not eliminate jurisdictional complexity entirely, it allows parties to mitigate many of these challenges by pre-selecting a neutral forum and a juridical seat, thereby reducing the risk of competing national court proceedings.
2. 2. Enforceability and cross-border reach
Arbitration further decouples adjudicatory authority from the location of assets or the domicile of the parties and, through the New York Convention, offers a harmonised and internationally recognised enforcement framework. This is a critical advantage where counterparties, assets, and enforcement targets are dispersed across multiple jurisdictions and effective relief depends on cross-border enforceability.
3. 3. Technical expertise and procedural flexibility
Arbitration enables parties to appoint decision-makers with experience in financial markets, technology, or blockchain systems. Tribunals can also tailor procedure to the dispute, allowing focused expert evidence, streamlined document production, and bespoke timetables — particularly valuable where disputes turn on code functionality or platform mechanics.
4. 4. Confidentiality and commercial sensitivity
Crypto assets are often used for the degree of transactional confidentiality they can offer, reflecting a preference among market participants for discretion in commercial dealings. Arbitration aligns with this preference by generally providing a greater level of privacy than court litigation, albeit not absolute confidentiality. This is particularly attractive where disputes involve proprietary technology, security vulnerabilities, or regulatory exposure, and helps to explain arbitration’s growing appeal as a dispute resolution mechanism in the digital asset space.
Developments and their impact
In recent years, leading arbitral institutions have modernised their rules to better accommodate digital-asset disputes. The London Court of International Arbitration and International Chamber of Commerce now expressly support virtual hearings, digital case management, and enhanced procedural efficiency, while institutions such as the Singapore International Arbitration Centre and Hong Kong International Arbitration Centre have continued to refine flexible, technology-friendly procedures. In parallel, specialist initiatives, including the UK Jurisdiction Taskforce Digital Dispute Resolution Rules, reflects a growing effort to align arbitration with on-chain and smart-contract disputes.
Regulatory change has also indirectly contributed to the growth of digital-asset arbitration. New and evolving regulatory regimes, including the EU’s Markets in Crypto-Assets Regulation (MiCA) and the UK’s expanding cryptoasset regulatory perimeter, have increased licensing, compliance, and disclosure obligations for crypto businesses. As a result, relationships between exchanges, custodians, issuers, service providers, and users are becoming more heavily contractualised. More detailed terms governing risk allocation, termination, and regulatory compliance have, in turn, generated a greater volume of contractual disputes. Many of these contracts default to arbitration, particularly where parties operate across jurisdictions or seek to avoid regulatory or reputational exposure associated with public litigation.
A further driver of arbitration’s rise lies in the widespread inclusion of arbitration clauses in crypto-related documentation. Most exchanges, custodians, token issuers, and service providers include arbitration clauses in their terms and conditions, custody agreements, and investment documentation. This contractual architecture channels disputes into arbitration as a matter of course.
More novel, though still comparatively limited, is the embedding of dispute resolution mechanisms directly into smart contracts. Some blockchain-based projects now incorporate references to arbitration frameworks or on-chain dispute resolution protocols, reflecting a desire for pre-committed, private adjudication capable of operating alongside decentralised systems. While adoption remains uneven, these developments underscore arbitration’s perceived compatibility with the ethos and mechanics of digital asset markets.
Crypto-related caseloads: what the statistics show
Despite the growing prominence of digital asset disputes, most leading arbitral institutions do not yet publish standalone statistics identifying “crypto” or “digital asset” cases as a distinct category. Publicly available data instead categorise disputes broadly (for example, finance, banking, or technology), making precise quantification difficult.
That said, institutions such as the ICC, LCIA, SIAC, and HKIAC consistently report high and growing caseloads in sectors that serve as proxies for crypto-related disputes, including financial services and technology. In parallel, court-based data in England and Wales indicate a marked rise in cryptoasset-related litigation, reinforcing the conclusion that disputes in the sector of digital economy are increasing overall, even if arbitration-specific figures remain under-reported.
Comment
The increasing use of arbitration in digital and cryptoasset disputes is being driven by a mix of legal, technological, and regulatory developments. Arbitration’s neutrality, flexibility, and strong enforcement framework make it well suited to the resolution of disputes that are inherently cross-border and technically complex. Recent updates to institutional rules have made it even more adaptable to these challenges.
That said, questions around jurisdiction, enforcement, and the interaction between arbitral proceedings, national courts, and evolving regulatory regimes continue to create uncertainty for parties and tribunals. In addition, the lack of detailed public data on crypto-related arbitration cases makes it harder to measure precisely how quickly this shift is taking place.
As digital assets become more embedded in mainstream commercial activity and regulation, arbitration is likely to play a growing role in resolving the disputes that arise. Rather than replacing court involvement altogether, the trend points towards a rebalanced system in which arbitration may operate as the primary forum, with national courts providing targeted support where needed. In this evolving landscape, the effective resolution of digital-asset disputes will require specialist counsel with the expertise to bridge complex technology and international arbitration procedure.
United Kingdom