A UK High Court has allowed a lawsuit over the alleged theft of 2,323 Bitcoin to proceed to trial, with the assets now valued at around $172 million.
A UK High Court has allowed a lawsuit over the alleged theft of 2,323 Bitcoin to proceed to trial, with the assets now valued at around $172 million.
The claim was by Ping Fai Yuen against his estranged wife, Fun Yung Li, over a 2023 transfer he says occurred without his consent.
Li attempted to have the case dismissed, arguing that the legal claim of conversion does not apply to digital assets.
The court agreed on that narrow point but allowed the case to proceed under alternative legal grounds. This leaves open the possibility of recovering the Bitcoin if the claims are successfully proven.
The case revolves around access to a Trezor hardware wallet. Yuen alleges that Li used home CCTV footage to secretly record his 24-word recovery phrase. With that phrase, control over the wallet could be recreated without needing the physical device.
The was later transferred through multiple transactions and distributed across 71 blockchain addresses. None of the funds has moved since December 2023.
Whoever controls the seed phrase controls the assets. The court acknowledged that this form of access bypasses traditional notions of possession.
A major issue in the case is whether existing legal frameworks can handle digital assets. The court reviewed long-standing principles from cases such as OBG v Allan, which established that conversion applies only to tangible property.
The judgment added that English law historically divides property into two categories, i.e., physical possessions and legal rights. Digital assets like Bitcoin do not fit neatly into either.
However, the Law Commission has recognized a potential “third category” of property, covering digital assets. The Property (Digital Assets etc) Act 2025 states that such assets can attract personal property rights even if they are neither physical nor traditional legal claims.
Despite this, the court held that conversion cannot currently extend to Bitcoin under existing law. That claim was struck out. Still, the judge left room for future legal development, noting that courts may create new remedies for wrongful interference with digital assets.
Although the conversion claim failed, the case continues under other legal theories. These include proprietary restitution, unjust enrichment, and constructive trust.
However, the dispute is not purely financial. Yuen was admitted to assaulting Li after discovering the alleged transfer and later pleaded guilty in 2024. Authorities also seized hardware wallets and recovery phrases during the investigation.
