6 | Cryptocurrency: increasingly stable

While the performance of cryptocurrencies as an asset class remains volatile, the English court’s approach has been anything but. The legal principles pertaining to the treatment of crypto and digital assets have continued to emerge in a predictable manner, affirming England’s pre-eminence for crypto disputes.

The stream of groundbreaking cases before and judgments issued by the English courts in recent years has slowed somewhat. This is testament to the fact that the common law has established and (generally) settled methods for dealing with crypto and digital assets, providing a degree of legal certainty, although risks around the recovery of stolen crypto remain high. While the common law has now long recognised that cryptocurrency and digital assets are property, that recognition was enshrined in statute by the Property (Digital Assets) Act 2025 which entered into force on 2 December last year.

We continue to see the court granting worldwide and domestic freezing relief over crypto assets, while taking a nuanced and sophisticated approach to the technology.

In January 2026 the High Court in Smithers & another v Persons Unknown1 granted freezing relief while dealing with the efficacy of the last-in-first-out tracing methodology for bitcoin in comparison to the UTXO (Unspent Transaction Output) method.

The court in Smithers also addressed the lex situs (‘law of the place’) of the digital assets, in respect of which there has been some uncertainty since the judgment in Ion Science2 which held that “the lex situs is where the owner resides or is domiciled”. A number of 2022 cases muddied the waters: in Danisz3 and Osbourne4 the court determined lex situs by reference to the claimant’s domicile, whereas residence was the determining factor in LMN v Bitflyer5 and Tulip Trading6. At the return date hearing for the freezing order in Smithers the court found that it had jurisdiction over the claim based on the claimant’s residence within the jurisdiction, pursuant to ‘gateway 9’ under Practice Direction 6B (following Tulip in practice, though citing only Ion Science). There therefore appears to be a growing consensus that the claimant's residence, rather than domicile, is determinative of the lex situs of a digital asset under English common law.

The English courts have also been willing to grant summary judgment in a claim for breach of trust and breach of contract, seeking orders for delivery up. The claimant in Sachs v Snape and others7 entered into an agreement with one of the defendants for the management of his cryptocurrencies with a view to generating profit, but when he requested the liquidation and return of his assets and profits, they were not paid to him. The Court granted summary judgment, noting (i) summary, as opposed to default, judgment was more likely to be recognised in jurisdictions where it might need to be enforced, and (ii) the defendants had generally been given the opportunity to participate in the proceedings. The Court appears to have taken a generous and pragmatic approach in order to assist the wronged claimant.

However, the English courts have also been defining the limits of crypto-related claims. The claimant in Ping Fai Yuen v Li8 brought claims in conversion and trespass after the defendants covertly recorded his seed phrase and stole a significant amount of bitcoin. The court held that, while the Property (Digital Assets) Act 2025 was intended to remove uncertainty as to the existence of a third category of property and allow the common law to develop a robust framework of personal property rights for digital assets, the torts of conversion and trespass do not apply to intangible property.