Bitcoin Tracing After Fraud: The High Court’s Approach in Wilden v Person Unknown
Key takeaways
- The High Court continued worldwide freezing and disclosure orders after a claimant lost around EUR 2.6 million in Bitcoin to a recovery scam.
- Blockchain analysis using the LIFO method traced the full amount across 49 transactions, despite deliberate mixing of the stolen assets with other funds.
- The judgment supports the position that cryptoassets can be treated as property and that mixing does not defeat tracing where assets remain identifiable.
- A claimant of limited means is not barred from interim relief merely because a cross-undertaking in damages carries little financial value.
- The exchange operator was ordered to pay indemnity costs of GBP 60,993.91 after it failed to respond to requests for assistance.
The judgment in outline
In Stephen Wilden v Person Unknown and Huobi Global S.A. [2026] EWHC 1355 (KB), the English High Court considered whether a proprietary and worldwide freezing injunction, together with a third-party disclosure order against a cryptocurrency exchange, should remain in place until trial. The decision confirms that the courts remain prepared to deploy these remedies in support of victims of digital asset fraud, including where the stolen assets have been deliberately combined with other funds to conceal their origin.
How the fraud unfolded
The claimant, a private individual, had earlier bought Bitcoin through the EuropeFX platform, which later ceased trading. In December 2025, he was approached by a person using the name “Brian Smith”, who claimed to be able to recover the assets connected with that platform. Acting on that claim, the claimant opened a new wallet and began sending Bitcoin to addresses under the fraudster’s control.
Over the period from December 2025 to January 2026, transfers worth roughly EUR 2.6 million, equivalent to about 32.46 BTC, passed through a series of transactions across several exchanges into those wallets. The claimant then lost access to the funds, and all contact with “Brian Smith” ended.
Proceedings before the High Court
The claimant issued proceedings and, on 17 March 2026, obtained, without notice, a proprietary and worldwide freezing injunction against the unknown fraudster, along with an order requiring the operator of the exchange to which the Bitcoin was believed to have been transferred to disclose account information.
His solicitors then wrote to the exchange, asking it to freeze the relevant assets and to provide details of the accounts concerned — a step commonly taken when seeking legal help with a frozen crypto account. On the evidence before the court, no meaningful help was given. The matter returned to court on the return date, when the judge had to decide whether the freezing and disclosure orders should continue pending trial.
The tracing evidence
The strength of the case rested on the quality of the tracing work. Forensic investigators instructed by the claimant analysed the blockchain using the recognised Last-In-First-Out (LIFO) method and followed the entire amount of the lost Bitcoin through 49 transactions to infrastructure linked with the exchange.
The experts did not stop at pointing to a probable destination. They rebuilt the whole chain of transfers, from the claimant’s own exchange wallets, through intermediate wallets used in the scam, and on to the exchange itself. They also confronted the problem of pooling: although the perpetrators had merged the claimant’s Bitcoin with other funds, the analysis isolated his specific share of the loss and showed that his assets could still be identified.
Detail proved decisive. The report set out each relevant transfer individually, recording recipient addresses, transaction hashes, values and dates. On that basis, the court was able to find that the claimant’s assets remained identifiable notwithstanding deliberate efforts to conceal where they had come from.
Continuing the freezing injunction
The Deputy High Court Judge applied the established three-part test for freezing relief, asking whether there was:
- a good arguable case on the merits;
- a real risk that the assets would be dissipated; and
- reason to conclude that granting relief was just and appropriate as a matter of discretion.
Following D’Aloia v Persons Unknown, the judge accepted that there is a good arguable case that cryptoassets are property capable of carrying property rights, and that the remedy of following survives mixing so long as the identity of the asset is preserved. The claimant had a good arguable claim in deceit. The risk of dissipation was assessed as very high, both because of the pooling transactions and because the exchange was not engaging with the claimant’s requests.
The disclosure order against the exchange
The court then turned to the Bankers Trust jurisdiction, applying the five principles set out by Warby J in Kyriakou v Christie Manson & Woods:
- Good grounds existed for concluding that the assets belonged to the claimant.
- There was a real prospect that the information sought would help to locate or preserve those assets;
- The order went no wider than necessary.
- The claimant’s interest in disclosure outweighed any detriment to the respondent.
- Suitable undertakings were given to pay the respondent’s expenses of compliance, to compensate the respondent in damages should loss result, and to use the information obtained only for tracing the assets.
The judge held that all five requirements were met. Of particular interest is the treatment of the claimant’s limited resources: relief should not be refused solely because a claimant cannot offer a financially valuable cross-undertaking (Allen & Ors v Jambo Holdings), especially where the fraud itself had taken away his savings.
Service outside the jurisdiction and costs
Permission was granted to serve the proceedings out of the jurisdiction under CPR PD 6B paragraph 3.1(25), the gateway covering information orders against non-parties. Because the exchange’s address was unclear, the court also allowed service by alternative means, namely by email, under CPR 6.15.
As to costs, both the fraudster and the exchange operator were directed to pay the claimant’s costs of GBP 60,993.91 on an indemnity basis. The judge indicated that the exchange might have avoided a costs order had it cooperated, but found that, on the facts, its failure to engage was unreasonable.
The place of the decision in the developing case law
Alongside authorities such as D’Aloia and Jones v Persons Unknown, this judgment adds to a growing body of English case law on cryptoasset tracing and interim relief. It demonstrates what effective tracing evidence involves in practice: a recognised methodology, a complete record of the transaction trail, and a disciplined attribution of pooled funds to individual claimants.
Two practical points follow. For those who have lost assets to fraud, the decision shows that mixing stolen cryptoassets with other funds does not, of itself, place them beyond recovery. For exchanges, the cost order makes clear that ignoring a properly made request for information can have financial consequences.
