Nancy Carol Smithers & Anor v Persons Unknown

In a cryptoasset fraud claim, a court may proceed in defendants’ absence where they have been properly served, have not responded, and the applicable principles for an absent defendant are satisfied. Property that remains identifiable in a defendant’s possession remains the claimant’s property and may be ordered to be returned. Bitcoin transaction outputs were treated as discrete, identifiable assets rather than funds irreversibly mixed on transfer. The same Bitcoin could therefore be returned. Fungible assets such as USD Coin and Ethereum lose their individual identity on transfer, so compensatory relief in fiat currency is appropriate.

The Claimants sought summary judgment after a sophisticated fraud induced transfers of approximately £10.5 million in money and cryptoassets to addresses controlled by the Defendants. The first group, comprising the alleged perpetrators, was not pursued at the hearing. The application concerned receiving-address Defendants, most of whom were served by transferring a non-fungible token or an OP_RETURN message containing a link to the proceedings. Three individuals responded and were excluded from the application; three receiving addresses were not served.

The central issues were whether the hearing could proceed in the remaining Defendants’ absence, whether the Claimants had established deceit and proprietary entitlement, and whether the different cryptoassets could be returned or required compensatory relief.

Disposition. Summary judgment was granted in favour of the Claimants against the relevant second-group Defendants, subject to the stated exceptions. The application was not pursued against the first group, the three individuals who responded, or the three unserved receiving addresses.

1. Proceeding in absence. Having regard to the principles in R v Jones [2001] EWCA Crim 168 at [22.5], as applied in European Union v Syria [2023] EWHC 1116 at [1-6], Certain Underwriters at Lloyd’s v Syrian Arab Republic [2018] EWHC 385 (Comm) at [3], and African Export-Import Bank v South Sudan [2025] EWHC 1079 (Comm) at [17], the court was satisfied that the hearing should proceed in the Defendants’ absence. The relevant Defendants had been properly served, had not responded, and had no defence. The Claimants had a good claim in principle.
2. Identifiable property. The claim was primarily one in deceit, or fraudulent misrepresentation. Where the Claimants’ property remained identifiable and was held by a Defendant, it remained the Claimants’ property and could be ordered to be returned.
3. Bitcoin. The evidence established that Bitcoin transaction outputs remain discrete and identifiable units until spent. They do not merge into a homogeneous balance like liquid funds. The Bitcoin held at the receiving addresses was therefore the same property taken from the Claimants and had to be returned.
4. Fungible cryptoassets and orders. USD Coin and Ethereum were fungible. Their identity was lost on transfer and receipt, so the precise assets could not be returned. A compensatory remedy in fiat currency was appropriate. The precise Bitcoin and dollar amounts were left to the implementing Order. The Claimants were awarded indemnity costs, including £230,000 for their current solicitors payable within 14 days; former-solicitor costs were to be assessed if not agreed.

Not stated in the judgment.