Crypto assets have moved from novelty to mainstream and so have the disputes. From hacked exchange accounts and failed token launches to insolvent businesses holding significant digital reserves, the matters reaching commercial litigators are faster moving, cross‑border and technically dense. For insolvency practitioners, digital wallets may be highly valuable assets but the easiest to dissipate.
The English courts have recognised that crypto assets can constitute property capable of supporting proprietary injunctions and freezing orders. The point was made plain in AA v Persons Unknown, where the Commercial Court granted a proprietary injunction over traced Bitcoin and endorsed the UK Jurisdiction Taskforce's analysis on crypto assets as property.
Later decisions have extended that reasoning to non‑fungible tokens (NFTs): in Osbourne v Persons Unknown, the High Court treated NFTs as property and, in subsequent orders, permitted innovative service mechanisms to support relief.
A further development came in Wang v Darby, one of the first fully reasoned trial judgments involving digital assets. The court analysed the contractual and equitable framework around a failed DeFi investment, treating tokens as ordinary property.
Recognition of property rights, however, only gets a claimant so far. Control of a private key is control of the asset. If keys are lost or tokens have been shuffled through mixers to blur their original path, remedies can become purely theoretical. The practical task is to identify counterparties, secure cooperation from intermediaries and obtain targeted orders quickly enough to matter.
Crypto disputes rarely respect borders as pseudonymous parties, offshore exchanges, distributed servers and DeFi protocols complicate matters. English courts have been prepared to anchor jurisdiction where the right facts exist.
In the frequently cited Ion Science decision (ex parte), the court accepted at least at an interim stage that the location of a crypto asset may be the place of the owner’s domicile, which can be decisive for service and governing law questions.
The Court of Appeal’s decision in Tulip Trading v Bitcoin Association added further clarification. While focused on fiduciary duties of developers, the judgment emphasised that English courts will assume jurisdiction where there is a substantial connection to England, even in decentralised ecosystems. It signals a willingness to adapt traditional principles to blockchain‑based relationships.
Once jurisdiction is established, the courts have been pragmatic about service. In appropriate cases they have authorised alternative service by electronic means including email, platform messaging and, in a small number of crypto‑fraud claims, via airdropped NFTs to the relevant wallet addresses. Osbourne and D’Aloia are touchstones for that trend.
Tracing and exchanges
Blockchain records illuminate the movement of value but not the person behind a wallet. The critical step is therefore compulsion against intermediaries. The court has shown a readiness to grant Bankers Trust and Norwich Pharmacal orders against exchanges, including out of the jurisdiction where justified. Ion Science opened the door and Fetch.ai reaffirmed the approach by pairing disclosure with proprietary as well as freezing injunctions.
The High Court’s decision in Piroozzadeh v Persons Unknown reinforced this trajectory. The court confirmed that claims involving misappropriated cryptoassets are properly characterised as constructive trust claims, enabling service out under the necessary or proper party gateway. It also emphasised that disclosure orders must be framed to capture the realistic custodians of data, particularly where exchange structures are opaque.
The combination of tracing analysis plus well‑targeted disclosure often determines outcomes. Where an exchange’s structure or location is opaque, orders should be framed to cover the realistic custodians of relevant data and to capture both account‑level identifiers and on‑chain routing information. Delay can erode value as tokens can be swapped, bridged or mixed within minutes.
In insolvency, crypto holdings may draw scrutiny. Office holders will test custody arrangements, decision‑making and record‑keeping with the same intensity applied to other high‑volatility assets.
Directors who have speculated with corporate funds, commingled wallets, failed to segregate keys or used personal devices for corporate custody could be made the subject of misfeasance allegations. Contemporary records of trading rationale, risk limits, counterparties, authorisations and key management controls often mark the difference between reasoned business judgment and recoverable breach.
Courts will require expert evidence that explains how value moved and why that matters for the pleaded claims. The blockchain analytics, methodology and chain‑of‑title analysis must withstand scrutiny, particularly where funds have passed through mixed wallets.
Focus must be on preserving evidence immediately and preparing draft orders that specify wallet addresses, assets as well as exchanges with precision. A forensic specialist should be instructed at the outset. Whilst none of this is novel in principle, it can be the difference between an enforceable judgment and an empty one in crypto disputes.
Crypto assets are intangible, volatile and portable but they are not beyond the reach of English law. In this frontier, preparation is more than half the remedy.
Dipesh Dosani is managing partner at London firm Lincoln & Rowe
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