The Bitcoin theft case or the UK High Court

The season of “bitcoins moving into more caring hands” in the United Kingdom seems to be officially open (we wrote about this situation before, but let’s look at it again in more detail). A story that looks like a Netflix series script, but in reality is a very real case with $165 million at stake.

Once upon a time in the UK there lived a quite respectable married couple: Ping Fai Yuen and his wife Fun Yung Li. Everything was like for ordinary people – shared life, shared plans… and, as it later turned out, very different views on crypto assets. Ping turned out to be a forward-looking man (or simply lucky) and over the years accumulated a very solid amount of bitcoin. Not on an exchange, not “somewhere in the cloud,” but in classic style – on a cold hardware wallet. The amount at the time of events was about $165 million. That is, not “for a rainy day,” but rather “for a rainy decade ahead.”

But then comes what usually happens not in investment blogs, but in family dramas. The relationship cracked, things moved toward divorce, and here not only jurisprudence came into play, but also… domestic intelligence. Fun Yung apparently decided that trust is good, but video surveillance is more reliable. Cameras were installed throughout the house, and one day they captured a truly valuable moment: Ping entering the seed phrase of his wallet. That very “sacred key” which in the crypto world is more important than a passport, a seal, and a notary combined.

After that, everything happened quickly and, it must be admitted, technically competently. In 2023, the wife quietly withdrew all the funds from the wallet and distributed them across about 70 addresses. A classic fragmentation scheme to make tracking more difficult. Not an impulsive act, but a well-thought-out operation.

But then another character enters the story – Ping’s daughter. It is she who warns her father that something suspicious is happening at home. And Ping, to his credit, did not panic and chose a mirror approach: if we are in the era of video surveillance, why not add some audio? Recording devices appear in the house.

And here the plot finally turns into a comedy of situations. Because these recordings capture how Fun Yung discusses with her sister the details of the “operation”: how the funds were withdrawn, how to further “clean” them, and what to do with all of it. Essentially, ready-made evidence. It would seem – the ending is obvious. There is the fact of fund withdrawal, there are recorded conversations, there are nine-figure damages. Take all this, go to court – and then the classic: asset recovery, compensation, applause.

But no. This is the United Kingdom, not a TV show. The court, having heard this almost detective-like story, issued a decision that can safely be classified as an “unexpected twist.” The logic was roughly as follows: existing law traditionally protects ownership of tangible property. And cryptocurrency… well, let’s say it does not quite fit into the usual framework. Not a house, not a car, not a safe with cash. Rather something intangible, a set of digital records. And as a result, the claim of unlawful appropriation, to put it mildly, did not receive the response Ping had hoped for. Simply put – the court is not in a hurry to treat bitcoin as classical “property” in the way convenient for the claimant.

Of course, the story does not end here. Ping still has the option to approach it from another angle – through constructs like “unjust enrichment.” The legal battle will continue, and perhaps in higher courts the conclusions will be different. But the precedent itself has already turned out to be quite illustrative.

The paradox of the situation is that in the crypto world there has long been a strict rule: “whoever holds the keys owns the asset.” No options, no appeals. And now another layer is added – the legal one. Where it may turn out that even with evidence, recovering funds is not as easy as it seems.

And here an unpleasant but important question arises. If the system has not fully decided what a crypto asset is – property or “something else” – then where is the boundary of protection? And does this create a gray zone where digital assets can be “redistributed” with fewer risks than traditional ones?

Of course, drawing the conclusion “in England you can safely steal crypto” would be about as reasonable as “jumping with a parachute without checking it because once it opened by itself.” Legal practice is slow but persistent. And cases like this are exactly the building blocks from which clearer regulation is later constructed. But the fact remains. The crypto market once again reminds us: this is serious business. And if earlier the main threats were hackers and exchanges, now another item is confidently added to the list of risks – family circumstances.

So a cold wallet is, of course, good. But as practice shows, sometimes it is also worth thinking about a “cold head” when it comes to where and to whom you enter your seed phrase. Because the market may forgive volatility. But stories like this – not really.