Crypto tokens offering investors a share of potential payouts from a UK car finance mis-selling scandal have surfaced on a Kazakhstan-registered digital trading platform, raising regulatory concerns. The tokens are connected to a legal claim involving Courmacs Legal, a law firm representing 1.6 million drivers seeking compensation for alleged mis-selling of vehicle finance agreements.
The tokens, advertised on the Bitfinex Securities exchange since June 2023, promise holders up to 50% of net proceeds from the motor finance claims, after payment of successful compensation awards. According to documents associated with the listing, the issuer—distinct from Courmacs—aimed to provide litigation funding to support the processing and origination of these vehicle finance claims. Courmacs Legal leads the underlying claim but has denied direct involvement or awareness of the crypto tokens being offered.
Courmacs suggested that investors who originally lent funds to support the legal action had securitized those loans and subsequently sold interests linked to them, portions of which ultimately back the digital tokens. The law firm confirmed it secured litigation funding from Eram Capital Partners in September 2024. Eram, which coordinated the Bitfinex offering alongside other unnamed investors, described the financing arrangement as fully compliant with anti-money laundering regulations and Courmacs’ regulatory requirements.
The Financial Conduct Authority (FCA) expressed broader apprehension over the growing use of complex offshore financing structures in consumer legal claims, which may be driving a surge in speculative litigation within the UK financial services sector. Though the regulator refrained from commenting on specific cases, it confirmed an ongoing market study into how such financing arrangements affect claim volumes and industry costs.
Campaign groups have also voiced concern over the emergence of profit-driven mass litigation models. Seema Kennedy, executive director of Fair Civil Justice, warned that these developments highlight the need for urgent governmental action to regulate collective legal actions and mitigate potential risks to the public interest.
Separately, Courmacs is undertaking pro bono legal action against the FCA on behalf of consumer advocates, arguing the current £9.1 billion compensation scheme for car finance mis-selling does not adequately benefit affected drivers.
No evidence has been presented suggesting any illicit origin of funds supporting the legal claims. Nevertheless, the use of exotic, tokenized financing methods has intensified debates about the sustainability and economic impact of cross-border investment in UK consumer litigation.