Victims of crypto-fraud face a daunting road to recovering their assets. At least initially, the identity of the fraudsters is often unknown. With expert help, the location of the crypto-assets might be traceable, but it is subject to change at any moment. Even if those challenges can be overcome, there is every risk that stolen tokens might be dissipated, potentially rendering an eventual judgment against the fraudsters valueless.
Accordingly, claimants’ first step in most crypto-fraud litigation is to apply urgently to court for an order freezing stolen tokens in their presently known location. However, given that the nature of crypto-assets is such that “they exist nowhere and everywhere at the same time”[1], choosing the appropriate jurisdiction in which to litigate is not straightforward.
Although the Law Commission last year published a consultation paper (‘Digital assets and (electronic) trade documents in private international law’) (“Consultation Paper”) which considered some possibilities for establishing jurisdiction in such cases, in its recent decision in Smithers v Persons Unknown [2026] 3 LWUK 397 (“Smithers”), the English High Court has provided welcome pragmatic guidance on the approach that should be taken.
‘Omniterritorial’
Crypto-assets exist as part of a digital store of data (a ‘distributed ledger’) shared across a network of computers anywhere in the world – Blockchain is perhaps the best-known example. The ‘ledger’ – that is, the notional record of the asset’s ownership over time, transaction history and structural rules – is peer-to-peer and highly decentralised by design; a direct challenge to traditional concepts of centralised banking with state-backed authority.
Where, then, is a crypto-asset at any given time? Is it where the relevant exchange is administered? Where the rightful owner is? Where the person with effective control over the asset it? The answer is, arguably, all of the above and more.
Crypto-assets are, in this way, ‘omniterritorial’. As the Law Commission has observed, “… the problem is not that the objects have no genuine connections to a single territory. Rather, it is that they exhibit too many genuine connections to too many territories, each in equal measure”.[2] How, then, does a crypto-fraud victim identify the most appropriate jurisdiction in which to litigate?
In assessing whether or not they have jurisdiction over a dispute, the courts of England and Wales first consider whether the dispute falls within any of the ‘jurisdictional gateways’ described in Practice Direction 6B of the Civil Procedure Rules (“PD 6B”). However, given the relevant gateways rely heavily on the concept of territoriality in private international law, their application to ‘omniterritorial’ crypto-assets is not obvious or straightforward.
Law Commission review
The law in this area is currently under review by the Law Commission. In its mid-2025 Consultation Paper, the Law Commission observed that English case law on jurisdiction in crypto-fraud cases was mixed and somewhat inconsistent.[3]
Claimants in crypto-fraud cases typically rely on one or more of the following gateways into the English courts:
- The tort gateway, which applies to claims in tort where (inter alia) “damage was sustained, or will be sustained, within the jurisdiction” (PD 6B, para 3.1(9)); and/or
- One or more of the property gateways, which offer a pathway into the English courts:
- for claims that relate “wholly or principally to property within the jurisdiction” (PD 6B 3.1(11)); or
- where a constructive or resulting trust claim is advanced relating to assets within the jurisdiction (PD 6B 3.1(15)(b)).
On the application of the tort gateway, in the Consultation Paper the Law Commission had provisionally suggested that in cases of fraud relating to digital assets, the focus ought to be on where the claimant was physically present at the time they were deprived of the crypto asset (and that considerations going to the claimant’s personal connection to the jurisdiction, like habitual residence and domicile, ought not be relevant).[4]
The application of the property gateways to crypto assets involves a (necessarily) artificial ‘localisation’ of those asset(s). As to this, the Law Commission has provisionally proposed that the courts’ focus ought to be on the place of effective or practical control of the relevant asset. Given crypto-tokens are generally designed to be controlled exclusively by private keys, the location of the person(s) who know or have access to that information may be the fictionalised ‘location’ of the relevant asset.[5]
A recent example – Smithers
In Smithers, the applicants appear to have been victims of the ‘Inferno Drainer’ fraud – a now well-documented phishing scam that operated as a ‘scam as a service’. Developers made malware available for sale, the purpose of which was to ‘drain’ crypto wallets. That malware was purchased by cybercriminals and embedded into websites masquerading as trusted cryptocurrency platforms. Victims were lured to these websites and duped into connecting their wallets and initiating what they believed to be legitimate transactions, exposing their crypto-assets to fraudulent activity.
With expert assistance, the applicants in Smithers linked certain crypto accounts to the alleged fraud and obtained an urgent ex parte order freezing those accounts in mid-February 2026. At that time, the perpetrators and holders of those accounts were unknown. With a few exceptions, that remained the case on the return date for the order in March 2026, when the Court had to determine whether the order should continue.
Stephen Midwinter KC, sitting as a Deputy Judge of the High Court, accepted the applicants’ argument that the tort gateway applied on the basis there was a good arguable case that damage was sustained in the jurisdiction. The Judge reasoned that “where crypto-assets are taken from an individual who is resident in England and Wales, the damage is sustained within England and Wales for the purposes of a claim in tort”, relying on a decision to similar effect in 2020.[6] The Judge emphasised “the importance of taking a realistic and pragmatic approach” to the application of the jurisdictional gateways, “in particular in claims involving apparently international frauds relating to assets that exist on the internet”. In that context, the Judge observed, “[d]ebates as to where such [crypto-] assets are ‘located’ in a technical sense are unlikely to be fruitful or to provide a sensible basis for identifying the courts that should have jurisdiction”.[7]
Conclusion
The Smithers decision is an example of the English courts applying the jurisdictional gateways pragmatically when faced with applications for urgent relief arising from crypto-fraud, when claimants need swift access to interim relief to prevent stolen assets from disappearing into the ether. It is a development that is likely to be welcomed by practitioners, seeking to square the omniterritorial nature of crypto-assets with the existing and well-understood jurisdictional rules. The approach in Smithers also avoids the potential for arbitrary outcomes that might result, e.g., from the Law Commission’s provisional suggestion that the focus ought to be on where the claimant was physically located at the time their digital assets were taken.
Needless to say, this is a dynamic area of the law. The Law Commission’s final report and recommendations on these and related issues is expected later this year.
[1] A Held, ‘Crypto Assets and Decentralised Ledges: Does Situs Actually Matter?’ in A Bonomi, M Lehmann and S Lalani (eds), Blockchain and Private International Law (2023) p 250.
[2] Law Commission, ‘Digital assets and (electronic) trade documents in private international law: Consultation paper’ (5 June 2025) (“Consultation Paper”) at paragraph 2.49.
[3] Consultation Paper at paragraph 4.117.
[4] Consultation Paper at paragraph 4.236.
[5] Consultation Paper at paragraphs 4.141- 4.143.
[6] Smithers at paragraph 9, citing Ion Science v Persons Unknown [2020] EWHC 3688 (Comm).
[7] Smithers at paragraph 9.