High Court confirms that tort of conversion cannot be used to claim back stolen cryptocurrency

On 10 March 2026, the decision of Mr Justice Cotter was handed down in Ping Fai Yuen v Fun Yung Li & Anor [2026] EWHC 532 (KB)

The High Court has held that the tort of conversion, and (in all likelihood) trespass are not available causes of actions for claimants when seeking to recover cryptoassets as it is an intangible asset.

Claimants looking for recourse for stolen cryptoassets will have to instead frame the claim in different causes of action such as deceit, or unjust enrichment.

Brief facts

When compared to many crypto disputes, the facts were relatively straightforward. Cotter J described them as “very far from complex”. The Claimant owned over 2000 Bitcoin, stored in a cold wallet, and valued at around £160 – 180 million at the time of the judgment.

In August 2023, the Claimant’s Bitcoin was moved without his knowledge or consent, allegedly by the Defendants in the Claim, his former wife or her sister. The Bitcoin was sprayed around to over 70 addresses, none of which were held at exchanges.

After discovering the fraud, the Claimant assaulted the First Defendant which resulted in his arrest and later conviction. His report of the matter to the police also resulted in the arrest of the First Defendant, and the seizure of 10 cold wallets and 5 recovery (seed) phrases.

Procedural steps taken

On 27 November 2025, the Claimant obtained (on a without notice basis) an asset proprietary injunction and disclosure order against the Defendants (the “Sweeting Order”).

Shortly before the 18 December 2025 return date hearing, the Claimant finalised their pleadings, previously provided to the court in draft form. The pleaded causes of action were in conversion (i.e. wrongful interference with the Claimant’s cryptoassets) and in trespass.

Meanwhile, the First Defendant engaged in proceedings by providing an affidavit, but only “essentially a one sentence response confirming that she was “unaware of any information required to be provided in response to the matters...”. The Second Defendant did not engage, instead apparently evading service.

Although the Sweeting Order was continued by Cotter J at the return date, there followed a series of applications:

• First, the First Defendant applied for strike out on the basis that conversion and trespass were bad in law.
• Second, the First Defendant simultaneously applied for security for costs (the “Security Application”.
• Third, the Claimant applied to amend his pleadings to add in more familiar causes of action, including unjust enrichment, breach of confidence, causing loss by unlawful means and proprietary restitution/constructive trust (the “Amendment Application”).

Can conversion and trespass apply to intangible assets?

The First Defendant argued that the torts of conversion and trespass to goods cannot apply to intangible assets such as Bitcoin.

The Claimant countered that the Property (Digital Assets etc) Act 2025 (the “Digital Assets Act”), which came into force on 2 December 2025, recognised a third category of property and was relevant. It states:

“A thing (including a thing that is digital or electronic in nature) is not prevented from being the object of personal property rights merely because it is neither— (a) a thing in possession, nor (b) a thing in action.”

Therefore, that this was a developing area of the law, and the conversion allegations should not be struck out at the interim stage.

The High Court agreed with the First Defendant’s position. It found that it was bound by the House of Lords decision in OBG v Allan [2007] UKHL 21, the ratio of which is “crystal clear.”

It is also the case that physical contact is necessary before a claim in trespass to goods can be made out. Physical contact, (and therefore interference), is impossible for cryptoassets on a literal interpretation.

Was there ‘physical interference’ with the Bitcoin?

Cotter J gave a stay of execution on the trespass claim arising out of an oral submission from the Claimant.

Counsel for the Claimant referred to the possibility that in order to transfer the Bitcoin the First Defendant had touched the wallet and/or used or altered property/data.

Cotter J stated that the oral submission had taken him “by surprise” but he “[could not] see how a cause of action could be successful on the facts as alleged”. Acknowledging that this was a strike out application, Cotter J compromised, giving the Claimant 7 days to update their pleadings on the issue, absent which the trespass claim would also be struck out.

Amendments and Security

Cotter J allowed the Amendment Application despite some initial resistance from the First Defendant regarding the availability of a conspiracy claim.

As for the Security Application, this was dismissed. The Claimant’s residence out of the jurisdiction engaged the relevant CPR r. 25.27 threshold condition. However, as to the “just” factor, Cotter J noted that the Claimant had “demonstrated a very high probability of success” in his claim. This reduced the likelihood of there being an enforceable costs order at the end of the case. Further, Cotter J was concerned about the First Defendant’s conduct in seeking excessive security, raising the possibility that it was being used “as an instrument of oppression”.

The changing landscape of the law on cryptocurrency

The uncertainty in the Claimant’s initial position appears to have been prompted by the dual developments of the court and legislation which recognise cryptocurrency as property under English law (see Tulip Trading Ltd v Bitcoin Association for BSV & Ors [2023] EWCA Civ 83 and our article on it is here; and the Digital Assets Act). Some of the points discussed in Ping had also been addressed at length in the Law Commission’s paper which preceded the Digital Assets Act, which were cited in the case.

Cotter J recognised that there may be scope for development of another cause of action/remedy; with some elements similar to the law of conversion; but not of conversion itself. 

Analysis

There were two interesting and important points arising from this judgment:

1. Conversion remains unavailable when seeking recovery of intangible assets including cryptoassets – the majority of the House of Lords in Allan “saw [conversion] as set and limited in scope” such that “the reasoning [in Allan] would not permit of a third category of property being covered by the tort”; and
2. There may in future be scope for the common law to develop a new tort to address coverage of the new third category of property – Cotter J stated that, following the observations of Knowles J in Armstrong DLW GmbH -v- Winnington Networks Ltd [2012] EWHC 10 (Ch), “there now seems that there may be a tort, or tort-like, remedy against a person who interferes with the claimant’s rights in an item of intangible property”. This is however a point for another day. Cotter J said that he would not reach conclusions on it. He also noted that, here, the need for the tort was “unclear” given the addition of restitutionary claims.

As an overarching point, this case illustrates the importance of getting the pleadings right in the first instance. This is particularly true in complex commercial litigation matters, and those involving cryptocurrency.

As ever with matters heard at the interlocutory stage, takeaways from decisions can be somewhat limited, given that complex points will either not be addressed or will survive for assessment at trial.