The Court of Appeal just wiped out a £1.7 million judgment against a cryptocurrency exchange, and the exchange walks away clean. The ruling, reported on September 30, 2026, reverses a lower-court order in a so-called wrong-wallet bitcoin fraud dispute. The amount at stake was roughly $2.3 million. That’s not pocket change.
The victim lost bitcoin to a scam. The coins were later traced through wallet activity, and the victim sought recovery. The lower court put the bill on the exchange. The exchange denied wrongdoing. Now the Court of Appeal agrees with it.
Tracing stolen bitcoin shows where it went, not who should pay. The exchange denied wrongdoing, and the Court of Appeal agreed.
The reason is blunt. The appeal court found the earlier decision rested on flawed evidence. In other words, the proof didn’t hold up the verdict. The judges accepted that the exchange had not caused the loss and treated it as an innocent third party, not a wrongdoer. So the loss moves away from the exchange and back into the fraud dispute itself.
Tracing a wallet is not the same as proving fault. That’s the big takeaway. Following bitcoin from point A to point B might show where money went. It doesn’t automatically show who should pay for it. Exchanges handling disputed transfers tied to fraud allegations will notice. Victims chasing intermediaries without strong proof of fault may find the road narrower. A separate recent Court of Appeal ruling has also narrowed fraud recovery routes for victims of authorized push payment fraud.
It also may change how future wrong-wallet claims get pleaded and proved. Sloppy evidence won’t cut it. Crypto cases are messy enough already, and legal commentary says UK courts still struggle with them. This ruling adds another piece to a puzzle that’s far from finished. Related coverage of the dispute lists Huobi Global Ltd. in context, alongside Hailsham Chambers as a relevant law firm.
English courts have already treated bitcoin as property in earlier crypto litigation. The hard part is what duties, if any, come with it. The Court of Appeal touched that ground before in Tulip Trading, when it reversed a High Court ruling and allowed fiduciary-duty arguments to proceed. That earlier appeal was described as opening the door to claims that developers may owe duties to assist in recovery of stolen bitcoin.
For investors, the case is a reminder that multi-signature access controls and maintaining proper documentation and audit trails can matter greatly when a transfer is later disputed.
