Recovering stolen crypto-assets: Lessons from a recent High Court case

In a judgment handed down on 5 June 2026, Deputy High Court Judge Vassall-Adams KC granted the continuation of a proprietary and worldwide freezing order against a ‘Person Unknown’ who stole Bitcoin valued at about €2.5 million from the Claimant. 

The Court also granted Norwich Pharmacal relief against Huobi Global S.A, the owner of the cryptocurrency exchange HTX, with service out of the jurisdiction by way of Gateway 25 and service allowed by alternative means. The Claimant believes that HTX not only holds the relevant cryptocurrency, but would also be able to reveal the account holder who perpetrated the fraud.

In this hearing, the Claimant was awarded all of his costs (£60,993.91) on the indemnity basis.

On the face of it, this is a success for the Claimant. But the complexities of recovering stolen cryptoassets (and the recent proceedings and sanctions against HTX) mean that it is far from certain that the Claimant will be able to enforce any judgment he ultimately obtains. 

The original investment: Was it a scam from the beginning?

The Claimant made his first investment in around 2019 when he purchased Bitcoin through an online platform known as EuropeFX. 

EuropeFX ceased operating as an online platform around 2021, and the Claimant was unable to recover his Bitcoin. He was unsure how to go about recovering it, writing it off as lost.

It’s worth pausing here to say that it is unclear if EuropeFX itself was a scam. Notably, it is included in IOSCO’s investor protection list, for being an unregistered or unlicensed entity offering financial products or services. There are warnings about it in several jurisdictions. 

In the UK, the F.C.A highlighted that Europe FX Trade was a clone of an F.C.A authorised firm and warned that scammers may give out false details and mix them with the correct details of the registered firm. 

The specific platform used by the Claimant may well have been operated by fraudsters, in order to extract funds from individuals like the Claimant. At the time of its operation, it was common for fraudsters to run fake platforms which would subsequently shut down when victims sought to withdraw their “profits”.

EuropeFX is not the reason for the loss pursued by the Claimant in this judgment. It is only how the story started.

The loss of €2.5 million

Several years after the initial investment, the Claimant was contacted out of the blue by a “Brian Smith” (represented in the Claim as the Defendant, Person Unknown). This individual claimed to be a UK-based investment adviser. Smith led the Claimant to believe that he could recover the lost money from EuropeFX. Convincingly, Smith knew the Claimant’s investment details, including the date on which the Bitcoin was purchased, the account balances, trades, credits, and withdrawals. 

Having gained the trust of the Claimant, Smith persuaded him to transfer around €2.5 million into a “LedgerLock” cryptocurrency wallets, between December 2025 and January 2026. The Claimant was locked out of “Ledgerlock”, his passwords no longer worked, and Smith disappeared. The €2.5 million was gone. 

Unfortunately, this is a typical scamming tactic. Opportunistic fraudsters promise victims that they can recover lost assets on the basis of up-front transactions (known as advance fee or recovery scams). Once the money is transferred, the victim no longer has access to it. 

It is probable that Smith was somehow linked to the original Europe FX scam. Alternatively, information may have been available on the dark web to perpetrate the second scam. 

For people who invest in cryptoassets or are seeking to recover lost funds, it is worth remaining vigilant about cold calls relating to your investments, even where they appear to know specific details. 

Tracing

The judgment refers to an expert blockchain tracing report, on which the case against the crypto exchange HTX relies. This was not a trial judgment, but the 2024 decision in D’Aloia v Persons Unknown illustrates the evidential challenges of tracing cryptoassets through multiple intermediary transactions and the importance of accurate service attribution.

According to the judgment, the Claimant transferred funds through 49 transactions from exchange accounts to two Bitcoin addresses controlled by the fraudsters. The Bitcoin was subsequently consolidated into a further address, which has been flagged on several blockchain intelligence platforms as holding stolen funds and remained active until April 2026.

The Claimant's expert adopted a Last-In-First-Out (LIFO) tracing methodology. By contrast, in Smithers v Persons Unknown, Waksman J described the UTXO-based approach as a "more reliable" method of tracing Bitcoin transactions. Given Bitcoin's UTXO architecture, tracing specific transaction outputs generally provides a more accurate representation of asset movements than accounting methodologies such as LIFO or FIFO.

In this case, however, the tracing methodology is unlikely to have materially affected the conclusions, as the Claimant's Bitcoin represented the vast majority of funds held at the relevant address and was transferred onward before significant additional deposits were received.

Based on our brief searches, the funds were then dispersed to addresses attributed to Kyrrex, a nested service operating on HTX infrastructure. Consequently, deposits may appear as HTX deposits in blockchain analytics tools, despite being received by Kyrrex, potentially limiting HTX's visibility over the underlying customer accounts and records.

The role of the exchange 

HTX is a centralised cryptocurrency exchange, which would be expected to operate appropriate Know-Your-Customer and Anti-Money-Laundering procedures 

However, the Claimant’s correspondence with HTX, and ultimately its non-compliance with the order shows that it is unwilling to properly engage with legitimate requests for the return of stolen cryptocurrency. The judge stated that it is “thereby providing a safe haven for the proceeds of crime. Presumably this is something that Smith and the other persons unknown who are behind this fraud are aware of and rely upon.”

The judgment refers to the action that the FCA is currently taking against HTX. On 10 February 2026, the FCA announced that it commenced a legal action against the crypto exchange HTX for illegally promoting crypto-asset services to UK consumers. See our article on it here. That enforcement action remains ongoing. On 26 May 2026, twelve days after the Hearing, Huobi Global S.A. was placed on the sanctions list.

Issuing against “Person Unknown”

The Claim was issued against ‘Person Unknown’, which appears to specifically target the person who was posing as Smith. Fraudsters often hide behind pseudonyms, and it is unclear who currently controls the Claimant’s traceable cryptoassets. When bringing such claims, it is always worth casting one’s net as wide as possible. In the 2024 judgment in Mooij v Persons Unknown [2024] EWHC 814, these categories included:

• Individuals or companies who obtained access to the Claimant’s Bitcoin between specified dates and transferred the assets to other accounts.
• Individuals or companies who owned or controlled accounts into which the transferred Bitcoin was received.
• Individuals or companies who were innocent receivers of assets, with no reasonable grounds for believing those assets belonged to the Claimant.

Good arguable case 

The Judge accepted that there was a good arguable case on the basis of assertions in the skeleton argument, but without sight of a Claim Form or Particulars of Claim. This was understandable given the apparent lack of a reasonable defence to Mr Wilden’s claim. The causes of action were referred to as in deceit and conversion “among others”.

However, as a cautionary note, recent case law has confirmed that conversion is not available for intangible assets including cryptocurrency. See our article on it here.  

Analysis

A new regime for cryptoasset regulation is coming, and it is expected to come into force on 25 October 2027. The Government has also separately legislated in the form of the Property (Digital Assets etc) Act 2025 to ensure that digital assets are capable of being categorised as property notwithstanding that they are neither a thing in possession nor thing in action. For now, disputes involving exchanges continue to be guided by the common law.

This case is another example of the challenges that Claimants face when litigating in respect of stolen cryptoassets. The most significant is whether that Claimant is able to ultimately recover those assets, particularly when they have not identified the perpetrator.

As noted above, Huobi Global S.A. was placed on the UK sanctions list a mere 12 days after Mr Wilden’s hearing due to apparent links to the Russian regime.

All in all, there seems a slim chance of recovery in this matter given the previous dealings of HTX and its reputation. Already they have not respected a court order in this case, and that looks unlikely to change. 

The full judgment is available here: Stephen Wilden v Person Unknown & Anor [2026] EWHC 1355 (KB)

# Authored by and Fred Buret, Blockchain Investigations Manager at Recoveris, who specialises in cryptocurrency tracing, digital asset investigations, and blockchain forensics.