U.K. Man Sues Estranged Wife Over Alleged $172M Bitcoin Theft via Home CCTV

The High Court of England and Wales has permitted a lawsuit alleging the theft of 2,323 bitcoin—currently valued at approximately $172 million—to proceed to trial, in a case that tests how traditional English property law applies to digital assets.

Plaintiff Ping Fai Yuen claims his estranged wife, Fun Yung Li, used home CCTV cameras to secretly obtain the recovery phrase for his Trezor hardware wallet and transferred the bitcoin without his permission in August 2023, when the holdings were worth just under $60 million.

While the court rejected Yuen’s primary claim of “conversion”—a legal remedy traditionally applied to physical property—the case will continue under alternative legal claims that could enable recovery of the assets if his allegations are proven at trial.

The Alleged Theft: Surveillance and Seed Phrase Compromise

Incident Timeline

According to court filings, Yuen stored approximately 2,323 bitcoin on a Trezor hardware wallet secured by a PIN and protected by a 24-word recovery phrase—the mechanism by which any holder can recreate the wallet and access funds.

In July 2023, Yuen’s daughter warned him that Li was attempting to take his bitcoin. Yuen subsequently installed audio recording equipment in the residence to gather evidence. On August 2, 2023, the bitcoin was transferred from his wallet without authorization, then routed through multiple transactions and ultimately dispersed across 71 different blockchain addresses, where the funds have remained dormant since December 21, 2023.

Audio Recordings as Evidence

The court filings describe recordings from July 29, 2023, that allegedly capture Li discussing CCTV cameras set up in the house to observe where Yuen concealed his wallet password. Excerpts from the audio recordings reportedly contain phrases including “The Bitcoin has transferred to me” and “take all of it.”

Yuen alleges that Li, potentially with assistance from her sister Lai Yung Li (named as second defendant), covertly recorded him to obtain the recovery phrase and subsequently executed the transfer.

Aftermath: Assault Charge and Police Investigation

Confrontation and Criminal Charges

Upon discovering the transfer, Yuen confronted Li and assaulted her. He later pleaded guilty to assault occasioning actual bodily harm and two counts of common assault in 2024.

Law Enforcement Response

Yuen reported the theft to police, leading to Li’s arrest in 2023. Officers seized approximately 10 crypto hardware wallets during a search of her residence, at least three bearing names attributable to Yuen. However, Li provided a “no comment” interview, made bail, and was released. Police subsequently confirmed they would take no further action pending new evidence.

Legal Proceedings and Property Law Questions

Primary Claim Rejected

Li moved to dismiss the case, arguing that Yuen’s primary claim of “conversion”—a legal doctrine traditionally applied when someone takes physical property—cannot apply to digital assets such as bitcoin. The High Court judge agreed with this position, acknowledging that English conversion law historically addresses tangible property.

Alternative Claims Preserved

Despite rejecting the conversion claim, the judge ruled that the case can proceed under different legal theories that could enable bitcoin recovery if Yuen’s allegations are proven. The matter will now advance to a full trial.

Judicial Assessment

Following a March 2, 2026 hearing, Justice Cotter issued a judgment expressing strong preliminary views on the merits:

“In my judgment the claimant has demonstrated a very high probability of success. The evidence is that he was warned of what the First Defendant was seeking to do, the transcripts are damning; and when the First Defendant’s property was searched, the necessary equipment to exfiltrate the Bitcoin was found.”

The judge noted Li’s opportunity to present counter-evidence and her decision not to do so, adding that “twenty-four years as a first instance judge have repeatedly highlighted the wisdom of applying Occam’s razor”—the principle that the simplest explanation is often correct.

Asset Tracing and Current Status

Blockchain Trail

Following the alleged theft, the bitcoin was moved through several transactions and now resides across 71 blockchain addresses not associated with cryptocurrency exchanges. The funds have remained completely dormant since December 21, 2023, suggesting the assets have not been liquidated through conventional on-ramps.

Legal Remedies Sought

In November 2025, Yuen applied for a “proprietary asset preservation injunction,” seeking:

• A declaration of ownership of the bitcoin

• A freezing order on Li’s crypto assets

• Return of the bitcoin or equivalent value in GBP

Trial Timeline

Given bitcoin’s price volatility, Justice Cotter emphasized that “an early trial is necessary.” No specific trial date has been set, but proceedings are expected to advance expeditiously.

Frequently Asked Questions

What is the central legal issue in this bitcoin theft case?

The case tests whether traditional English property law remedies—specifically “conversion,” which historically applies only to physical property—can be applied to digital assets like bitcoin. While the High Court rejected the conversion claim, it allowed the lawsuit to proceed under alternative legal theories that could still enable recovery if the alleged theft is proven at trial.

Where is the stolen bitcoin now?

According to court documents, the 2,323 bitcoin was transferred through multiple transactions following the August 2023 theft and currently sits across 71 different blockchain addresses not associated with cryptocurrency exchanges. The funds have shown no movement since December 21, 2023, indicating they have not been converted to fiat currency through conventional exchange channels.

What evidence supports the plaintiff’s allegations?

The plaintiff submitted audio recordings allegedly capturing discussions about using CCTV cameras to observe where he concealed his wallet password, with excerpts containing phrases like “The Bitcoin has transferred to me” and “take all of it.” Police searching the defendant’s residence also seized multiple hardware wallets, including some bearing the plaintiff’s name. The presiding judge described the evidence as “damning” and noted the defendant has not provided counter-evidence.