Husband claims spouse utilized CCTV cameras to appropriate $172 million in bitcoin from his hardware wallet.

The purported theft of 2,323 bitcoin has instigated a High Court legal battle examining the application of English property law to digital assets.

Strange case of spouses secretly recording one another, with one attempting to steal bitcoin and the other seeking to demonstrate the theft occurred, is now in a U.K. court. (Credit: Mahosadha Ong-Unsplash/Modified by CoinDesk)

What to know:

• A U.K. High Court judge has permitted a lawsuit regarding the alleged theft of 2,323 bitcoin, currently valued at approximately $172 million, to advance to trial.
• The husband, Ping Fai Yuen, alleges that his estranged wife secretly acquired his hardware wallet recovery phrase through home CCTV and transferred the bitcoin without his consent in 2023.
• While the judge dismissed his main claim of conversion, stating it typically pertains only to physical property, the case will continue under alternative legal arguments that may still allow for the recovery of the bitcoin.

A U.K. High Court judge allowed a lawsuit concerning the alleged theft of over 2,323 bitcoin to progress last week, in a case that underscores how the legal framework in the country is still evolving to encompass traditional property law in relation to cryptocurrency.

U.K. resident Ping Fai Yuen asserted in court documents last week that his estranged wife, Fun Yung Li, utilized home CCTV cameras to clandestinely obtain the recovery phrase for his hardware wallet and transferred 2,323 bitcoin BTC$74,794.01 without his approval in August 2023, according to the High Court of England and Wales docket.

The bitcoin was valued at just under $60 million at the time of the alleged theft 30 months ago, but it has now escalated to roughly $172 million at the current price of just over $74,000.

The stolen cryptocurrency was secured in a Trezor cold wallet protected by a PIN. However, anyone possessing the 24-word recovery phrase could recreate the wallet and relocate the funds, as noted by the court. The bitcoin was subsequently transferred through multiple transactions and is currently held across 71 blockchain addresses not associated with exchanges. The funds have remained inactive since December 21, 2023, as per the court’s records.

Yuen stated that he installed audio recording devices in the residence after being informed by his daughter that Li was attempting to take the bitcoin. After discovering the transfer, Yuen confronted Li and committed an assault. He later pleaded guilty to assault occasioning actual bodily harm and two counts of common assault in 2024. Officers confiscated several hardware wallets and recovery phrases during a search of her residence, though authorities did not take further action pending additional evidence.

Previously, according to the filings, the wife requested the court to dismiss the case, contending that since the husband’s primary claim was conversion, which in England is a legal term generally applied to the taking of physical property, it could not be applicable to digital assets like bitcoin.

The judge concurred with the wife’s argument but decided that the case may still progress under different legal claims that could potentially allow the husband to reclaim the bitcoin if his allegations are substantiated. The case will now advance to trial, as indicated by the judge.