03 August 2026
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In Smithers and another v Persons Unknown Category 1 and others, the English Commercial Court granted summary judgment in favour of two victims of a crypto asset fraud, ordering the return of Bitcoin and awarding compensatory damages for fungible tokens.
The decision, handed down by Mr Justice Bright, offers an insight into the practical realities of crypto asset recovery.
The two claimants, Ms Nancy Smithers, a Canadian national, and Ms Angelina Usanova, a Maltese national, were induced to invest the equivalent of approximately £10.5 million with what they believed to be a genuine cryptoasset trading platform operating under the name "Raliplen" and later "Servelius". In May 2025, Ms Smithers was contacted by a man who claimed to be an expert trader and persuaded her to open an account and transfer both fiat currency and cryptoassets over a period of months to Servelius for trading. Ms Smithers introduced Ms Usanova to the fraudster, and Ms Usanova likewise transferred cryptoassets to Servelius.
By October 2025, the fraudsters, known only by aliases, had removed all the cryptoassets from the accounts and disappeared.
Specialist investigators were able to trace the stolen assets to exchange deposit addresses and final destination private addresses. In some cases, the individuals behind those addresses could be identified; in most, they could not.
The claimants brought proceedings against "persons unknown" and effected service by transferring either a non-fungible token containing a link to the proceedings, or an OP_RETURN message, directly to the relevant receiving addresses. Our previous article Jurisdictional issues in crypto currency disputes (Part 2): service on "persons unknown" and service by alternative means identified authorities, including D'Aloia and Osborne, which recognised NFT airdrop as a legitimate mode of service. Smithers confirms that this technique is now firmly embedded in mainstream Commercial Court practice and not merely a novel workaround.
The court accepted expert evidence that Bitcoin transaction outputs do not commingle into a single homogenous balance. Each unspent output remains discrete and uniquely identifiable until it is spent. In this sense Bitcoin differs from many other types of commonly traded cryptocurrencies which are fungible.
The fact that the Bitcoin that was misappropriated by way of the fraud could be identified as the very same property in the receiving wallets meant that the victims were able to follow their proprietary interest into that particular property and it was ultimately ordered to be returned in specie.
By contrast, the court found that USD Coin and Ethereum, being fungible, had lost their identity upon transfer to and receipt by the receiving addresses, such that it was not possible to identify precisely the same assets as were taken from the claimants. The claimants therefore elected a compensatory remedy in fiat for those tokens, rather than pursuing a proprietary restitutionary claim. This distinction is instructional for practitioners structuring proprietary injunctions and tracing claims, and echoes the tracing and constructive trust principles discussed in the first article in Harneys' cryptocurrency publication series: Jurisdictional issues in crypto currency disputes (Part 1): service out of the jurisdiction.
With no defendants appearing, the court proceeded on the R v Jones line of authority and granted summary judgment for deceit against the receiving defendants, together with indemnity costs of £230,000.
The underlying asset-tracing exercise in Smithers, which identified exchange deposit addresses and the individuals who ultimately control them, is a good example of the investigative groundwork that will often need to be undertaken before pursuing legal action, such as Norwich Pharmacal and Bankers Trust applications against exchanges in the Cayman Islands and BVI, as explained in our article: Identifying wrongdoers in the crypto space: the Norwich Pharmaca...
The decision, handed down by Mr Justice Bright, offers an insight into the practical realities of crypto asset recovery.
The two claimants, Ms Nancy Smithers, a Canadian national, and Ms Angelina Usanova, a Maltese national, were induced to invest the equivalent of approximately £10.5 million with what they believed to be a genuine cryptoasset trading platform operating under the name "Raliplen" and later "Servelius". In May 2025, Ms Smithers was contacted by a man who claimed to be an expert trader and persuaded her to open an account and transfer both fiat currency and cryptoassets over a period of months to Servelius for trading. Ms Smithers introduced Ms Usanova to the fraudster, and Ms Usanova likewise transferred cryptoassets to Servelius.
By October 2025, the fraudsters, known only by aliases, had removed all the cryptoassets from the accounts and disappeared.
Specialist investigators were able to trace the stolen assets to exchange deposit addresses and final destination private addresses. In some cases, the individuals behind those addresses could be identified; in most, they could not.
The claimants brought proceedings against "persons unknown" and effected service by transferring either a non-fungible token containing a link to the proceedings, or an OP_RETURN message, directly to the relevant receiving addresses. Our previous article Jurisdictional issues in crypto currency disputes (Part 2): service on "persons unknown" and service by alternative means identified authorities, including D'Aloia and Osborne, which recognised NFT airdrop as a legitimate mode of service. Smithers confirms that this technique is now firmly embedded in mainstream Commercial Court practice and not merely a novel workaround.
The court accepted expert evidence that Bitcoin transaction outputs do not commingle into a single homogenous balance. Each unspent output remains discrete and uniquely identifiable until it is spent. In this sense Bitcoin differs from many other types of commonly traded cryptocurrencies which are fungible.
The fact that the Bitcoin that was misappropriated by way of the fraud could be identified as the very same property in the receiving wallets meant that the victims were able to follow their proprietary interest into that particular property and it was ultimately ordered to be returned in specie.
By contrast, the court found that USD Coin and Ethereum, being fungible, had lost their identity upon transfer to and receipt by the receiving addresses, such that it was not possible to identify precisely the same assets as were taken from the claimants. The claimants therefore elected a compensatory remedy in fiat for those tokens, rather than pursuing a proprietary restitutionary claim. This distinction is instructional for practitioners structuring proprietary injunctions and tracing claims, and echoes the tracing and constructive trust principles discussed in the first article in Harneys' cryptocurrency publication series: Jurisdictional issues in crypto currency disputes (Part 1): service out of the jurisdiction.
With no defendants appearing, the court proceeded on the R v Jones line of authority and granted summary judgment for deceit against the receiving defendants, together with indemnity costs of £230,000.
The underlying asset-tracing exercise in Smithers, which identified exchange deposit addresses and the individuals who ultimately control them, is a good example of the investigative groundwork that will often need to be undertaken before pursuing legal action, such as Norwich Pharmacal and Bankers Trust applications against exchanges in the Cayman Islands and BVI, as explained in our article: Identifying wrongdoers in the crypto space: the Norwich Pharmaca...