In Yuen v Li,1 the High Court struck out a claim for conversion of bitcoin, rejecting the opportunity to develop an appropriate remedy for interference with digital assets in English law.

The claimant, Mr Yuen, was a wealthy individual who owned approximately 2,323 bitcoin (at the time of writing worth about £130 million). He stored these cryptoassets in a hardware “cold wallet”, access to which depended on a confidential seed phrase. The first defendant, Ms Li, was his estranged wife. The claimant alleged that Ms Li had secretly obtained the seed phrase by covertly recording him. Using this information, she was said to have accessed the wallet without his knowledge or consent and, in December 2023, transferred the entirety of the bitcoin holdings to other digital wallet addresses—71 in total. The bitcoin remained in those wallets and had not been dissipated by the time the High Court considered the matter. In support of his claim, Mr Yuen relied on audio recordings which allegedly captured Ms Li discussing the acquisition of the seed phrase, the transfer of the bitcoin, and the practical difficulties of laundering or realising such a substantial quantity of cryptocurrency. Additional evidence came from police investigations, including material obtained through searches and seizures.

The claimant sought, inter alia, to recover his bitcoin or damages (in GBP) for interference with it. The problem he faced was that English law has no single remedy for infringement of proprietary rights. Instead, there are several causes of action available in different overlapping circumstances. As the proprietary classification of digital assets is not something with which the law is yet familiar, it was not clear what was the appropriate cause of action on these facts. He therefore pleaded multiple causes of action including conversion, unjust enrichment, causing loss by unlawful means and proprietary restitution.2

Cotter J, giving the judgment of the High Court, struck out the claim for conversion. This is a curious result for three reasons. First, it is difficult to square with his admission that “it would offend common understanding of property rights (and the analysis of the [Law] Commission) were the Claimant not not [sic] able to gain recovery of the Bitcoin