UK High Court Rules Conversion Tort Cannot Recover Stolen Cryptocurrency, March 2026

In Ping Fai Yuen v Fun Yung Li & Anor [2026] EWHC 532 (KB), handed down March 10, 2026, the King's Bench Division of the High Court of England and Wales struck out the claimant's conversion claim in relation to stolen cryptocurrency. The case arose from an alleged theft of digital assets. The court held that conversion is a tort that protects possessory rights in tangible personal property and cannot extend to cryptocurrency.

The court applied the ratio of OBG Ltd v Allan [2007] UKHL 21, which confines conversion to tangible chattels capable of physical possession. At paragraph 79 of the judgment, the court held that cryptocurrency does not satisfy this requirement. The court also considered the Property (Digital Assets etc) Act 2025, which recognises digital assets as a third category of personal property in English law but does not alter or create possessory rights of the kind required to sustain a conversion claim. The Act's recognition of a novel property category does not, of itself, make conversion available for digital assets.

Crypto businesses, custodians, and individual holders who suffer theft of digital assets in England and Wales cannot rely on conversion as a cause of action to recover those assets or their value from a wrongdoer. Claimants must instead pursue alternative proprietary or restitutionary remedies. Relevant options include a proprietary claim based on unjust enrichment, a constructive trust claim where the defendant holds identifiable assets on trust, or claims under any applicable contractual arrangement.

The decision leaves open the question of which specific causes of action will reliably succeed for digital asset theft under English law following the Property (Digital Assets etc) Act 2025. Practitioners advising clients on asset recovery should assess available remedies on a case-by-case basis given the developing state of the law.

Source: Ping Fai Yuen v Fun Yung Li & Anor [2026] EWHC 532 (KB), handed down March 10, 2026. Available at: https://caselaw.nationalarchives.gov.uk/ewhc/kb/2026/532. Confirmed March 17, 2026.

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