Facts
In Stephen Wilden v. Person Unknown and Huobi Global S.A. [2026] EWHC 1355 (KB), Deputy High Court Judge Guy Vassall-Adams KC considered whether to continue a worldwide freezing order and a disclosure order.
The claimant, Stephen Wilden, was a German engineering company director and had been defrauded of his life’s savings in the form of approximately 32 bitcoin, worth almost €2.6 million. In or around 2019, the claimant had originally purchased a small amount of bitcoin on EuropeFX. When that platform later ceased operations in 2021, the claimant was unable to recover his holding and treated it as a total loss.
Later, in December 2025, the claimant received a cold call from a man using the alias “Brian Smith” and claiming to be a UK-based investment advisor working for a company called LedgerLock, which was connected to EuropeFX. Smith had detailed knowledge of the claimant’s historic EuropeFX transactions, which was later suggested to have been obtained through public blockchain data or purchased databases, lending him the appearance of legitimacy.
Smith induced the claimant to set up two new wallets with LedgerLock and persuaded him that recovering his lost bitcoin required a series of further payments into the new LedgerLock wallets. Between December 2025 and January 2026, the claimant made transfers of around €2.6 million in the form of approximately 32 bitcoin into the new wallets controlled by Smith. In January 2026, the claimant discovered that he was locked out of the LedgerLock platform; his password no longer worked, and Smith stopped responding to his communications.
On 17 March 2026, the claimant obtained a without-notice proprietary and worldwide freezing order against Smith. On the same day, the claimant also obtained a disclosure order against Huobi for information regarding the stolen cryptocurrency. Interestingly, although there appears to be no allegation that Huobi was a party to the fraud, the disclosure order was sought and obtained on a “without-notice” basis.
Tracing
Using a “Last-In-First-Out” methodology, forensic investigators at Crypto Forensiq, who were instructed by the claimant, successfully traced 100% of the lost assets from the claimant’s exchange wallets to certain self-hosted “scam wallets”, where the perpetrators pooled transactions to obscure the origin of the funds. These funds were sent onward to infrastructure associated with the HTX exchange (formerly known as Huobi). Because the pooled inflows to HTX exceeded the claimant’s own loss, the forensic investigator’s report calculated the claimant’s specific share of loss, limited precisely to the 32.4572826 bitcoin he had transferred.
Importantly, the ‘pooling’ was said to have occurred before the assets entered the HTX platform. The decision did not state whether the assets were subsequently transferred into pooled or omnibus HTX wallets together with assets from other users and then treated as the general assets of the exchange.
According to the court, HTX responded to the claimant’s requests to identify Smith’s accounts, freeze the bitcoin, and preserve records with “formulaic”, “dismissive and non-cooperative” replies. In addition, HTX recommended that the claimant should inform the local police, stating that “his request will be escalated and so on” (Decision, paragraph 34).
HTX is currently on the Financial Conduct Authority (FCA) Warning List for operating in the UK without authorisation and is the subject of FCA enforcement proceedings for communicating financial promotions contrary to section 21 of the Financial Services and Markets Act 2000. In those proceedings, the FCA alleges that the company conceals its true ownership and control. Further, shortly after the Wilden decision, the UK Foreign, Commonwealth, and Development Office (FCDO) named Huobi in a sanctions package under its Russia sanctions framework.
The court’s decision
(1) The freezing injunction
The judge was satisfied that all three requirements for a freezing injunction were met: (1) there was a good arguable case in deceit that the bitcoin, as an asset to which property rights can attach, was subject to civil fraud; (2) the risk of dissipation was very high (given the perpetrators’ use of pooling transactions), and (3) it was just and appropriate to grant relief given the devastating impact of the fraud. The expert report was found to have established that the identity of the assets had been preserved despite mixing over the course of the pooling transactions prior to entry into the Huobi platform. The judge therefore continued the proprietary and worldwide freezing injunction made on 17 March 2026 against Smith until trial or further order.
(2) Disclosure order against HTX
The judge held that the Bankers Trust criteria were satisfied: (1) the forensic report established ownership of the bitcoin; (2) HTX was likely to hold information capable of identifying Smith; (3) the order was tied specifically to the relevant bitcoin, going no wider than necessary; (4) the claimant’s interest in recovery outweighed the minimal detriment to HTX; and (5) the claimant provided the necessary undertakings (even though the financial undertakings were necessarily limited).
(3) Service out of the jurisdiction
The judge concluded that the appropriate gateway for serving the application on HTX out of the jurisdiction had been met (CPR Practice Direction 6B, paragraph 3.1(25)). This is a relatively new gateway, only available since 1 October 2022, which allows for information orders against non-parties based in foreign jurisdictions. Alternative service by email was also permitted given the lack of cooperation and opaque address.
(4) Costs
Applying CPR Practice Direction 44.2(2)(a) – where the unsuccessful party bears costs – and following Dos Santos v. Unitel SA [2024] EWCA (Civ) 1109, [2025] KB 438, the judge held both defendants potentially liable for the claimant’s costs (£60,993.91 inclusive of VAT) on the indemnity basis. While Smith was plainly liable as the fraudster, the judge held that HTX had behaved unreasonably in its “complete lack of engagement”. Had HTX been more cooperative, these costs might have been avoided.
Commentary
The Wilden decision reinforces the High Court’s readiness to grant interim relief in cryptocurrency fraud cases and recognises the fact that crypto-assets are a form of property to which proprietary rights can attach and can be subject to tracing and following, even when pooled or mixed.
Crypto-asset exchanges will note that the decision did not appear to address whether the assets had been transferred into HTX omnibus wallets together with assets from other users and subsequently treated as the general assets of the exchange. A number of English decisions, including Piroozzadeh v. Persons Unknown & Ors [2023] EWHC 1024 (Ch) and D’Aloia v. Persons Unknown [2024] EWHC 2342 (Ch), have found that transferring crypto-assets into such wallets – in exchange for the transferring user being allocated credits on the exchange’s ‘off-chain’ ledger – may make the buyer a ‘purchaser for value without notice’ or ‘a bona fide purchaser’. In Piroozzadeh, the ex parte applicant’s failure to disclose defences arising from the omnibus nature of the wallets was itself sufficient reason to set aside the proprietary injunction against that wallet.
In this instance, HTX did not attend and was unrepresented at the return date hearing (with the initial injunction having been obtained without notice) and therefore did not itself make any such representations regarding omnibus wallets. While the freezing injunction had been served on HTX and it had been put on notice of the return date, HTX failed to comply with the court’s orders for disclosure or to attend the return date hearing and simply replied to suggest that the claimant should contact the police. The court was critical of these responses from HTX to the claimant, which it deemed “formulaic” and “dismissive”, and called out HTX’s “wholly unreasonable” failure to engage, which also led to an award of indemnity costs against the exchange.
This is therefore a salient reminder for crypto-asset exchanges of the court’s expectation that there must be cooperation with legitimate recovery efforts.
Client Alert 2026-141