UK High Court Hears $176M Bitcoin Theft Case Amid Dramatic Divorce Proceedings

In a landmark remote hearing, the UK High Court is currently presiding over a high-value Bitcoin theft case, drawing significant attention to the complexities of digital asset recovery within personal disputes. The plaintiff, Ping Fai Yuen, alleges that his estranged wife, Fun Yung Li, illicitly transferred 2,323 Bitcoins from his Trezor hardware wallet in 2023. Valued at approximately $176 million at the time of reporting, these substantial digital assets were purportedly exfiltrated after Ms. Li allegedly used home surveillance (CCTV) to secretly record Mr. Yuen’s seed phrase and access passwords.

Allegations of Covert Operations and Digital Asset Exfiltration

The dispute, deeply intertwined with ongoing divorce proceedings between Ping Fai Yuen and Fun Yung Li, escalated dramatically in July 2023. Mr. Yuen’s eldest daughter reportedly alerted him to her mother’s scheme to seize his Bitcoin, prompting him to install recording devices. Crucial audio recordings from July 29 and 31 emerged as pivotal evidence, allegedly capturing Ms. Li and her sister discussing the illicit transfer of funds.

Transcripts from these recordings reportedly include incriminating statements such as: “The Bitcoin has been transferred to me,” “Take it first,” “Be careful, he can’t trace us,” “Use a second wallet,” and even “Find a hacker.” The conversations also allegedly delved into strategies for handling large sums of money while evading detection by banks and law enforcement.

According to the judgment published by the King’s Bench Division of the UK High Court on March 10, 2026 (Yuen v Li [2026] EWHC 532 (KB)), Mr. Yuen claims that Fun Yung Li (the first defendant) and her sister, Lai Yung Li (the second defendant), were involved in “exfiltrating” the Bitcoins, which were then allegedly dispersed across 71 distinct cryptocurrency addresses. Court documents further reveal summaries of these recorded conversations, detailing the defendants’ purported plans to manage the substantial funds and avoid scrutiny.

Adding weight to the plaintiff’s claims, the judgment noted that during a search of the defendants’ residence, police discovered “equipment necessary for exfiltrating Bitcoin,” as described by the presiding judge.

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Police Intervention and Unresolved Questions

The alleged theft culminated on August 2, 2023, when the Bitcoins were suddenly transferred from Mr. Yuen’s cold wallet, leaving no further transaction trail. Following Mr. Yuen’s report, police arrested Fun Yung Li on December 23, 2023. A search of her property uncovered 10 cold wallets (including a Trezor device), 5 seed phrases, and several luxury watches. Law enforcement successfully unlocked four of these wallets, confirming three belonged to Mr. Yuen. However, despite these findings, authorities later stated “insufficient evidence” and opted against further action unless new evidence emerged.

The case’s personal backdrop is equally dramatic. In September 2024, Mr. Yuen was involved in a physical altercation with his wife after discovering the Bitcoin transfer. He subsequently pleaded guilty to charges of “causing actual bodily harm” and two counts of common assault on September 13, 2024, and served a sentence. Currently, Mr. Yuen resides in Thailand, while Fun Yung Li is based in Hong Kong. In court, Ms. Li has only submitted a brief denial of “lack of knowledge,” notably failing to attend the hearing herself, with her lawyer present merely as an observer. Her sister, Lai Yung Li, has reportedly evaded formal service and has yet to respond to the lawsuit.

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Key Procedural Rulings: High Probability of Success for Plaintiff

On March 10, 2026, Justice Cotter delivered a procedural judgment (Case No.: KB-2025-004313, Yuen v Li [2026] EWHC 532 (KB)), outlining several critical points:

• High Probability of Success: The judge found “very damning evidence” against the defendants, citing the daughter’s warning, the “extremely damaging” audio recordings, and the discovery of Bitcoin exfiltration equipment at the defendants’ residence.
• Asset Freezing Order Maintained: The 71 Bitcoin addresses remain frozen, with the court prohibiting the defendants from transferring or disposing of the assets.
• Partial Dismissal of Claims: Traditional claims of “conversion” and “trespass to goods” were deemed inapplicable to intangible assets like Bitcoin and were struck out. However, the plaintiff has been granted 7 days to amend his statement of claim, allowing him to pursue new causes of action such as “unjust enrichment,” “breach of confidence,” and “causing loss by unlawful means.”
• Other Directives: The court rejected the defendants’ application for Mr. Yuen to provide security for costs, approved alternative service methods for Ms. Li’s sister, and recommended the swift appointment of a single joint crypto tracing expert and an early formal trial.

Judge Emphasizes “Very High Probability of Success” and Urges Early Trial

In his procedural ruling, Justice Cotter underscored the plaintiff’s “very high probability of success” based on the evidence presented. He reiterated that the recorded conversations were “extremely damaging” and that the police discovery of relevant equipment at the first defendant’s residence significantly bolstered Mr. Yuen’s claims.

“In my judgment, the claimant has demonstrated a very high probability of success,” Justice Cotter stated. “The evidence shows that he was previously warned of the first defendant’s intentions, the transcripts are conclusive, and the necessary equipment for stealing Bitcoin was found during the search of the first defendant’s residence.”

Paragraph 102 of the judgment highlights that the first defendant, Fun Yung Li, had multiple opportunities to present her defense but chose not to. The fact that the Bitcoins remain in the transferred addresses also aligns with the plaintiff’s narrative, leading the judge to conclude a high likelihood of Mr. Yuen prevailing at a substantive trial.

Justice Cotter also indicated that should the parties fail to agree on the next steps, a case management hearing would be scheduled. He strongly recommended an early trial, deeming it “necessary” given the inherent security threats and volatile nature of Bitcoin.