U.K. High Court Allows Lawsuit in $172 Million Bitcoin Theft Case
A U.K. High Court judge has authorized a lawsuit to proceed regarding the alleged theft of 2,323 Bitcoin, currently valued at approximately $172 million, highlighting the evolving legal challenges surrounding digital asset ownership. The case centers on accusations that Ping Fai Yuen’s estranged wife, Fun Yung Li, illicitly obtained his hardware wallet recovery phrase and transferred the cryptocurrency without his consent.
The Alleged Theft and Initial Claims
Ping Fai Yuen claims that Fun Yung Li used CCTV cameras installed in their home to secretly record him entering his recovery phrase for his Trezor cold wallet in August 2023. The stolen Bitcoin was initially worth just under $60 million at the time of the alleged theft, but has since increased in value to roughly $172 million as of March 16, 2026, with Bitcoin trading at just over $74,000 CoinDesk.
Legal Challenges and the Tort of Conversion
The initial claim focused on the legal concept of “conversion,” traditionally applied to the taking of physical property. The wife argued that conversion could not apply to digital assets like Bitcoin. Mr. Justice Cotter agreed that the tort of conversion, as defined by the House of Lords in OBG Ltd v Allan [2008] 1 AC 1, is confined to tangible chattels and that the Property (Digital Assets etc.) Act 2025 does not alter this position Solicitors Journal.
Case to Proceed Under Alternative Legal Grounds
Despite rejecting the conversion claim, the judge ruled that the case can continue under alternative legal grounds, potentially allowing Yuen to recover the stolen Bitcoin if his allegations are proven. The funds were transferred to 71 blockchain addresses and have remained there since December 21, 2023 CoinDesk.
Evidence and Background
Yuen alleges that audio recordings captured his wife discussing the CCTV setup and the theft. Following the discovery of the missing cryptocurrency, Yuen confronted his wife and was later convicted of assault in September 2024 The Independent. A police search of her property in December 2023 uncovered ten cold wallets and five recovery seeds, though no further action was taken pending additional evidence.
Ongoing Legal Landscape for Digital Assets
This case underscores the challenges faced by the U.K. Legal system in adapting traditional property law to the complexities of cryptocurrency. The outcome of the trial will likely provide further clarity on how digital assets are treated under English law and could set a precedent for future cases involving cryptocurrency theft and ownership disputes.