British Man Accuses Wife of Spying on Seed Phrase! Embezzles 172 Million in Bitcoin, Wife Counters: Intangible Assets Don't Count as Embezzlement

British Man Accused of Divorced Wife Stealing 2,323 Bitcoins via Surveillance Cameras, Valued at Approximately $172 Million, Court Issues Asset Freeze and Legal Proceedings.

Former Spouse Turns Out to Be Thief? The Bitcoin Theft Under Surveillance

This is a legal dispute more bizarre than a Hollywood script, but it is playing out in the UK High Court. A man residing in the UK, Ping Fai Yuen, recently obtained approval to proceed with a lawsuit against his separated wife, Fun Yung Li, accusing her of secretly accessing information through home surveillance cameras (CCTV) in August 2023 and stealing his cryptocurrency assets.

According to court documents, this dispute involves up to 2,323 Bitcoin ($BTC), which at the time of the incident was worth about $60 million. However, with the crypto market’s surge, the current market value has climbed to approximately $172 million. The funds were originally securely stored in a PIN-protected Trezor hardware wallet. But since anyone holding the wallet’s 24-word recovery phrase can reconstruct the wallet on other devices and transfer funds, this became a critical security vulnerability.

Plaintiff Ping Fai Yuen claims that his wife, Fun Yung Li, secretly recorded him entering or verifying the recovery phrase via a surveillance camera installed in the living room, gaining control of the assets. On August 2, 2023, the entire amount was transferred out without the plaintiff’s permission, undergoing multiple complex transactions, and ultimately dispersed across 71 blockchain addresses not linked to any exchange.

Data observed by the court shows that these funds have not moved since December 21, 2023. This astronomical family dispute tests the trust between spouses and forces the UK legal system to confront the gray area of digital asset classification in law.

Spy vs. Spy Recordings Uncover Family Thief

As early as July 2023, Ping Fai Yuen received warnings from his daughter, claiming that his wife, Fun Yung Li, was attempting to steal his Bitcoin. To gather evidence, the plaintiff installed recording devices at home. These recordings later became key testimony in court, including discussions where Fun Yung Li talked about monitoring her husband’s secret PIN and wallet usage via surveillance cameras. The recordings captured highly incriminating conversations such as “The Bitcoin has already been transferred to me” and “Take everything.” Evidence also suggests that her sister, Lai Yung Li, may have been involved in the plan.

After discovering the missing assets, the plaintiff’s emotional distress led to legal troubles. He confronted his wife physically, resulting in a fight, and in 2024, he admitted to charges of actual bodily harm (ABH) and two counts of common assault. Police intervened, and multiple hardware wallets and backup recovery phrases were found at Fun Yung Li’s residence, with at least three wallets labeled with the plaintiff’s name.

Despite this, due to the complexity of the evidence chain and her exercising her right to silence and bail, police have not taken further action. This prompted Yuen to seek relief in civil court, applying in November 2025 for an asset preservation injunction to recover the digital wealth valued at $172 million.

Do Digital Assets Fall Under Traditional Theft Laws?

This case is a milestone in legal terms, highlighting the challenges the UK legal system faces in applying traditional property law to digital assets. Fun Yung Li’s defense lawyers attempted to have the case dismissed, arguing that the plaintiff’s main claim was “conversion.”

In UK legal terminology, conversion traditionally applies only to tangible property. Whether Bitcoin, as an intangible digital asset, can be classified as subject to “conversion” has been widely debated. The presiding judge, Cotter, ultimately accepted some of the defendant’s arguments, dismissing the main claim based on conversion but allowing the case to proceed under other legal avenues.

This ruling means that even if Bitcoin does not meet the traditional definition of “physical property,” the plaintiff can still pursue damages through equity law or other property rights claims. Judge Cotter noted in his ruling that the plaintiff demonstrated a high likelihood of success. He cited the principle of “Occam’s Razor,” stating that the simplest explanation is often the correct one. The defendant was warned beforehand, recordings contained highly incriminating content, and necessary equipment for transferring Bitcoin was found at her residence. The judge emphasized that although the defendant chose not to provide her own statement, the existing evidence is sufficient to move the case to trial.

Tracking 71 Wallet Addresses, Court Issues Asset Freeze

Currently, the flow of the 2,323 Bitcoins is under close surveillance. Although the funds are dispersed across 71 different blockchain addresses, since late 2023, these addresses have remained silent, with no signs of cashing out or further transfers. The court has issued a “Proprietary Asset Preservation Injunction” to freeze the defendant’s crypto assets and ultimately seek to return the Bitcoin or equivalent in GBP to the plaintiff.

Given Bitcoin’s high market volatility, Judge Cotter stated that early trial proceedings are necessary to prevent drastic value fluctuations during lengthy litigation, which could affect final compensation.

This case serves as a wake-up call for hardware wallet users worldwide. Even highly secure Trezor cold wallets remain vulnerable to physical surveillance and social engineering threats. The ongoing development of this case will be a significant reference point for UK and global cryptocurrency law, shaping how digital asset ownership is defined legally and what protections are available when such assets are “digitally stolen” within families. As the trial date approaches, this battle to recover over $172 million worth of Bitcoin will undoubtedly continue to attract close attention from the financial and legal communities.