A High Court dispute over about $172 million in Bitcoin moved forward after a judge narrowed the legal pathway but allowed the case to continue on alternative grounds. The ruling kept alive one of the most closely watched crypto recovery fights now before the English courts.
Ping Fai Yuen alleges that his estranged wife, Fun Yung Li, used covert home CCTV footage to capture the recovery phrase for his Trezor hardware wallet and then transferred 2,323 BTC in August 2023. At the center of the case is the claim that a physical surveillance breach led directly to the loss of control over a large Bitcoin holding.
The Case Turns on Seed Phrase Exposure and Asset Tracing
According to the claim, the recorded recovery phrase allowed access to be reconstructed and the Bitcoin to be moved out of Yuen’s control. The complaint says the 2,323 BTC was transferred to 71 separate addresses, turning a domestic security failure into a large-scale asset-tracing dispute.
Filed in November last year, the case values the disputed transfers at roughly $172 million, or about £180 million in the reporting cited. The scale of the alleged transfers has pushed the case beyond a private dispute and into a broader legal test for digital-asset recovery.
The judge rejected Yuen’s primary tort claims for conversion and trespass to goods, finding that those causes of action are tied more naturally to interference with tangible property. The court drew a clear line by holding that traditional tort remedies do not fit neatly when the asset in question is purely digital.
The Court Left Open a Different Recovery Route
Even so, the court accepted that Bitcoin can amount to property and allowed the case to proceed on alternative legal bases, chiefly proprietary restitution and unjust enrichment. That shift keeps the claim alive by focusing on tracing and beneficial ownership rather than forcing digital assets into legal categories built for physical goods.
Those remaining causes of action matter because they are aimed at reclaiming the value or ownership interest in the Bitcoin itself. The judgment therefore reframes the dispute as a question of tracing, valuation, and equitable recovery instead of ordinary physical interference.
The allegations also carry a blunt operational lesson for anyone relying on hardware wallets for custody. The case underlines that technical wallet security can fail completely when recovery phrases are exposed through physical surveillance or poor storage discipline.
For legal and compliance teams, the next phase of the case will be closely watched. How the court handles tracing, valuation, and remedies may shape future recovery strategies for misappropriated crypto under English law and influence how firms design custody protocols around seed phrase protection.