Blab Crypto
England and Wales Courts Expand Remedies to Combat AI-Driven Crypto Fraud
Digital fraud that targets investors, exchanges, custodians and private clients has become increasingly sophisticated, blending artificial intelligence, blockchain infrastructure, synthetic media and automation to conceal identity, obscure asset flows and trigger authorised payments. The courts in England and Wales have responded by adapting traditional civil remedies to the unique characteristics of cryptoassets.
The Property (Digital Assets etc) Act 2025, which entered force on 2 December 2025, confirms that cryptoassets can be treated as objects of personal property rights even when they are not in possession or in action. The Act provides a legal basis for proprietary claims and related interim relief, but it does not automatically attach every remedy to every digital asset. In Yuen v Li [2026] EWHC 532 (KB) the High Court struck out a conversion claim over misappropriated Bitcoin, underscoring that recognition of property status does not guarantee that all torts or injunctions will apply.
Key civil tools now available
Freezing and proprietary injunctions – The court may restrain a respondent from dealing with assets up to a specified value, including assets outside England and Wales. Proprietary injunctions focus on a claimant’s specific claim to an asset rather than the respondent’s general assets. Both orders are often accompanied by asset disclosure orders.
Disclosure orders – Norwich Pharmacal and Bankers Trust orders can compel third parties such as exchanges, wallet providers, banks and payment processors to provide information that helps identify wrongdoers and trace assets. The orders can be used against overseas non‑parties, but service, enforcement and local‑law issues must be addressed early.
Search and imaging orders – When there is a real risk that devices, seed phrases or cold wallets will be destroyed, the court may grant search and imaging relief. The threshold is high and the safeguards strict.
Persons unknown orders – Because many crypto fraud cases involve anonymous actors, the court can define respondents by description rather than name, allowing freezing, proprietary and disclosure relief while identities are investigated.
Alternative service – Conventional service may be impractical. The court may allow service by NFT airdrop or other blockchain‑based methods if the wallet address is known and evidence supports the approach. Email service is also possible where the address is active and controlled by the respondent.
Blockchain analytics – Specialist analytics can link wallet addresses, clusters and on‑ and off‑ramp points to real‑world actors. Analytics alone may not be sufficient when assets are held in cold wallets or when off‑chain records are required; disclosure, search/imaging or asset disclosure relief may still be necessary.
Judgment‑stage examinations – After a judgment, the court can require a debtor or company officer to attend court and give evidence about assets. Non‑compliance can amount to contempt.
Regulatory context
The FCA’s crypto roadmap outlines staged policy development on regulated cryptoasset activities, including custody, stablecoins, staking and market abuse. The UK government is consulting on a framework that will bring specified cryptoasset activities within the Financial Services and Markets Act 2000, covering dealing, trading platforms, custody and certain stablecoin and staking activities. The regime is expected to be fully operative before 2027.
Regulation does not replace civil court recovery. In most cases, urgent private‑law remedies will still be required to preserve evidence, identify wrongdoers and recover assets, often within days rather than weeks.
Practical steps for victims
1. Preserve data: export wallet addresses, transaction hashes, logs, device artefacts and communications. Disable auto‑deletion policies. 2. Engage specialists: forensic tracing and incident‑response support should be considered early. 3. Initiate urgent relief: seek advice immediately on whether an injunction or disclosure order is needed. 4. Notify relevant parties: banks, exchanges, insurers and authorities, and check regulatory or internal escalation obligations.
Conclusion
England and Wales courts now have a robust set of civil tools to address the rapid, AI‑driven fraud that characterises the modern crypto landscape. The Property (Digital Assets etc) Act 2025 provides the property‑rights foundation, while freezing and proprietary injunctions, disclosure orders, search and imaging relief and alternative service mechanisms enable courts to act swiftly. Regulation is progressing, but civil remedies remain essential for immediate protection and recovery. As the industry evolves, courts will continue to refine their approach to ensure that digital asset disputes are resolved efficiently and fairly.
The Property (Digital Assets etc) Act 2025, which entered force on 2 December 2025, confirms that cryptoassets can be treated as objects of personal property rights even when they are not in possession or in action. The Act provides a legal basis for proprietary claims and related interim relief, but it does not automatically attach every remedy to every digital asset. In Yuen v Li [2026] EWHC 532 (KB) the High Court struck out a conversion claim over misappropriated Bitcoin, underscoring that recognition of property status does not guarantee that all torts or injunctions will apply.
Key civil tools now available
Freezing and proprietary injunctions – The court may restrain a respondent from dealing with assets up to a specified value, including assets outside England and Wales. Proprietary injunctions focus on a claimant’s specific claim to an asset rather than the respondent’s general assets. Both orders are often accompanied by asset disclosure orders.
Disclosure orders – Norwich Pharmacal and Bankers Trust orders can compel third parties such as exchanges, wallet providers, banks and payment processors to provide information that helps identify wrongdoers and trace assets. The orders can be used against overseas non‑parties, but service, enforcement and local‑law issues must be addressed early.
Search and imaging orders – When there is a real risk that devices, seed phrases or cold wallets will be destroyed, the court may grant search and imaging relief. The threshold is high and the safeguards strict.
Persons unknown orders – Because many crypto fraud cases involve anonymous actors, the court can define respondents by description rather than name, allowing freezing, proprietary and disclosure relief while identities are investigated.
Alternative service – Conventional service may be impractical. The court may allow service by NFT airdrop or other blockchain‑based methods if the wallet address is known and evidence supports the approach. Email service is also possible where the address is active and controlled by the respondent.
Blockchain analytics – Specialist analytics can link wallet addresses, clusters and on‑ and off‑ramp points to real‑world actors. Analytics alone may not be sufficient when assets are held in cold wallets or when off‑chain records are required; disclosure, search/imaging or asset disclosure relief may still be necessary.
Judgment‑stage examinations – After a judgment, the court can require a debtor or company officer to attend court and give evidence about assets. Non‑compliance can amount to contempt.
Regulatory context
The FCA’s crypto roadmap outlines staged policy development on regulated cryptoasset activities, including custody, stablecoins, staking and market abuse. The UK government is consulting on a framework that will bring specified cryptoasset activities within the Financial Services and Markets Act 2000, covering dealing, trading platforms, custody and certain stablecoin and staking activities. The regime is expected to be fully operative before 2027.
Regulation does not replace civil court recovery. In most cases, urgent private‑law remedies will still be required to preserve evidence, identify wrongdoers and recover assets, often within days rather than weeks.
Practical steps for victims
1. Preserve data: export wallet addresses, transaction hashes, logs, device artefacts and communications. Disable auto‑deletion policies. 2. Engage specialists: forensic tracing and incident‑response support should be considered early. 3. Initiate urgent relief: seek advice immediately on whether an injunction or disclosure order is needed. 4. Notify relevant parties: banks, exchanges, insurers and authorities, and check regulatory or internal escalation obligations.
Conclusion
England and Wales courts now have a robust set of civil tools to address the rapid, AI‑driven fraud that characterises the modern crypto landscape. The Property (Digital Assets etc) Act 2025 provides the property‑rights foundation, while freezing and proprietary injunctions, disclosure orders, search and imaging relief and alternative service mechanisms enable courts to act swiftly. Regulation is progressing, but civil remedies remain essential for immediate protection and recovery. As the industry evolves, courts will continue to refine their approach to ensure that digital asset disputes are resolved efficiently and fairly.
