- 2,323 BTC ($172M) allegedly stolen using a recovery phrase obtained via CCTV
- UK High Court allows case to proceed despite rejecting primary legal claim
- Case could shape how English law treats digital assets like Bitcoin
- Funds remain inactive across 71 blockchain addresses since Dec 2023
Background of the Case
A legal dispute involving the alleged theft of 2,323 Bitcoin valued at approximately $172 million has been allowed to proceed to trial in the UK High Court, raising significant questions about how traditional property law applies to digital assets.
The claimant, Ping Fai Yuen, alleges that his estranged wife, Fun Yung Li, accessed his cryptocurrency holdings without permission in August 2023. According to court filings, he claims she obtained the recovery phrase to his hardware wallet by monitoring home CCTV footage.
Allegations of Unauthorized Access
The Bitcoin was stored in a Trezor hardware wallet, secured by a PIN and a 24-word recovery phrase. While the PIN protects physical access, possession of the recovery phrase allows full reconstruction of the wallet and transfer of funds. Yuen alleges that Li used surveillance footage from cameras inside their home to capture this recovery phrase, enabling her to move the funds without his consent.
Following the transfer, the Bitcoin was reportedly distributed across 71 separate blockchain addresses. Court records indicate the assets have not moved since December 21, 2023.
Legal Developments
The case initially faced a challenge from Li, who argued that the husband’s primary claim “conversion” does not apply to digital assets under English law, as it traditionally concerns physical property.
The High Court judge agreed with this argument and dismissed the conversion claim. However, the court allowed the case to proceed under alternative legal grounds, which may still enable recovery of the Bitcoin if the allegations are proven. This decision highlights ongoing legal uncertainty in the UK regarding how cryptocurrencies are classified and protected under existing laws.
Additional Context
The case also involves related criminal proceedings. Yuen said he later installed audio recording devices in the home after his daughter warned him that Li was attempting to access the Bitcoin. After discovering the transfer, he confronted Li and later admitted to assaulting her. He pleaded guilty in 2024 to multiple charges, including assault occasioning actual bodily harm.
Implications for Crypto Law
The case is being closely watched as it may set a precedent for how English courts handle disputes involving digital assets. It underscores key issues such as:
- Ownership rights over cryptocurrencies
- Legal remedies available for digital asset theft
- The applicability of traditional property law to decentralized assets
- As cryptocurrencies continue to gain mainstream adoption, such legal challenges are expected to play a crucial role in shaping regulatory and judicial approaches.
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