UK: Cryptoasset fraud: tracing stolen Bitcoin

Why should I read this?

The recent judgment in Wilden v Persons Unknown [2026] EWHC 1355 (KB) further demonstrates the broad powers which the court has to assist victims of frauds relating to digital assets, even in circumstances where fraudsters have taken steps to conceal those assets. 

The court continued a worldwide freezing injunction against the fraudster’s wallets held with Huobi Global SA (Huobi), the operator of the HTX cryptocurrency exchange (HTX). The court also granted a “Bankers Trust” disclosure order against Huobi. 

The decision matters for three reasons:

• First, it reaffirms that cryptoassets are property to which proprietary rights can attach;
• Second, the court granted freezing and disclosure relief despite the fraudster mixing the stolen assets with other funds; and
• Third, it confirms the service out gateway for disclosure applications against overseas parties.

What happened?

On 5 June 2026, Deputy High Court Judge Guy Vassall-Adams KC gave judgment in this case, where a German businessman lost approximately 32 Bitcoin (worth almost €2.6 million) to a fraudster.

In 2019, the claimant purchased Bitcoin through the online platform EuropeFX and continued to hold it until 2021, when EuropeFX ceased operating. The claimant was unable to recover his Bitcoin.

In 2025, the claimant received an unsolicited call from a person known as “Brian Smith”. Mr Smith claimed to work for a company called “LedgerLock”. He also knew specific details of the claimant’s earlier deposits with EuropeFX, presumably obtained from the blockchain.

Between December 2025 and January 2026, the claimant transferred approximately €2.6 million to what he believed were two LedgerLock wallets, set up with Mr Smith’s assistance. It later transpired that the wallets were controlled by the fraudster. The funds sent to LedgerLock were used to purchase c.32 Bitcoin through various intermediary cryptocurrency exchanges. In January 2026, the claimant was locked out of the platform and then realised that they had been the victim of a fraud.

The claimant was able to trace their funds into wallets held with Huobi, notwithstanding various attempts by the fraudster, including “pooling” the stolen assets with other assets to obscure their origin.

The freezing injunction

The court had little difficulty continuing the worldwide freezing injunction over the assets, against both the fraudster and Huobi. The court accepted the expert tracing evidence and was satisfied that the claimant’s Bitcoin remained identifiable despite the pooling transactions.

In making its order the court followed D’Aloia v Persons Unknown [2024] EWHC 2342 (Ch), which held that cryptoassets are property capable of attracting proprietary rights.

N.B. the Property (Digital Assets etc) Bill has now been passed by Parliament. The Act confirms in statute that digital assets are capable of attracting property rights). 

The “Bankers Trust” disclosure order

The claimant obtained forensic evidence which confirmed that all of the proceeds of his stolen funds were in wallets held by Huobi. The court therefore granted the disclosure order sought against Huobi, as recognised in Bankers Trust Co v Shapira [1980] 1 WLR 1274.

Notably, the court also accepted the claimant’s undertaking on damages despite his limited means, which the court found were caused by the fraud.

HTX refused to engage with the claimant’s requests for information. HTX is on the Financial Conduct Authority (FCA) Warning List for operating in the UK without authorisation. The FCA has also started proceedings against HTX for breaching section 21 of the Financial Services and Markets Act 2000 (FSMA). The Judge referred to these factors in support of its conclusions, stating:

“The fact that there are unregulated exchanges operating online behind hidden ownership and management structures heightens the risks still further as there is nobody to hold to account when they refuse to return stolen funds.”

Service out of the jurisdiction

The court granted permission to serve the application on Huobi outside England and Wales. The court accepted that the (relatively) new gateway concerning “information orders against non-parties” applied. The court also permitted alternative service by email.

Why does this case matter?

The decision shows:

• The claimant’s decision to obtain comprehensive tracing evidence assisted the court in granting the application. Early instruction of forensic analysts improves the chances of tracing stolen assets before they are moved.
• Although freezing orders in principle prevent funds being dissipated, they require the cooperation of cryptocurrency exchanges which are often based outside of the jurisdiction. Similarly, while a Bankers Trust order requires overseas cryptocurrency exchanges to disclose account information, the order may need to be enforced to ensure compliance. These obstacles mean that recovery of stolen assets remains a challenge.
• The courts of England and Wales have a broad range of powers at their disposal to assist victims of digital asset fraud in claims against persons unknown, including freezing or disclosure orders, jurisdictional gateways and alternative methods of service.

How ES can help

Eversheds Sutherland has the expertise to assist in cases concerning cryptocurrency and other digital asset fraud. We help clients obtain urgent freezing and disclosure relief and to pursue recoveries.

We can also assist in instructing forensic blockchain investigators to pursue the recovery of stolen cryptoassets through the English courts.