The claimant brought a claim against his estranged wife for the return of 2,300 bitcoin worth in excess of £150 million after she allegedly accessed a password-protected device called a ‘cold wallet’ used to store his Bitcoin and transferred them to numerous addresses/accounts.
The claimant sought the return of the Bitcoin and issued proceedings in the High Court. Due to the novelty of the remedy sought, the claim advanced a number of alternative arguments why the claimant’s wife should be ordered to return the Bitcoin.
When a person interferes with another person’s property by misappropriating it or selling it to a third party, this is called ‘conversion’ which is an actionable claim for the return of the property or the payment of damages.
The law of conversion only allows claims relating to tangible property with a physical presence or intangible property which would include intellectual property. Although the Digital Assets Act 2025 acknowledges that there may be a third category of property that is neither tangible nor intangible, the courts have yet to decide if such property can be the subject of conversion.
After the commencement of the proceedings, the Defendant made a successful application to strike out two of the claims for the return of the Bitcoin which had been advanced on the basis of the law of conversion and trespass to goods. The judge found that although there might be a need to develop the law of conversion to deal with property like cryptocurrency which cannot be readily categorised as tangible or intangible property, such a finding did not appear to be necessary because the claimant could rely on other claims such as such as unjust enrichment. The claim for trespass to goods could not proceed and was struck out because it was only capable of applying to tangible property.
The Claimant was given the opportunity to amend his claim to take account of the judge’s observations and the remaining claims will be considered by the Court. Clearly, the law applying to misappropriated cryptocurrency must be clarified and there would appear to be scope for legislation to provide protection for cryptocurrency owners.
Alex Haddad (ahaddad@nocklds.co.uk 0203 892 6805) works in the litigation department and deals with commercial and property litigation.