Introduction
For the third year, CMS has partnered with Solomonic's litigation analytics to produce a data-driven analysis of crypto disputes in England and Wales. The report tracks how the higher courts are applying the law to digital assets, an area where the Law Commission has concluded that reform should come "through further common law developments where possible." While 2025 may have seen fewer headline-grabbing litigation developments than previous years, there were nevertheless several significant trends and decisions that those operating in or facing the UK market should be aware of.
Claim Volumes and Underlying Issues
Starting with the headline numbers, a total of 206 High Court claims relating materially to cryptoassets have been identified between 2017 and 2025. While the data suggest a drop in 2025, claim volumes appear to have plateaued since 2022 rather than meaningfully declined.
However, the composition of those claims tells a more interesting story. Fraud claims continue to dominate, accounting for just over 65% of claims with an identifiable underlying issue in 2025. Insolvency-related claims also emerged as a notable category, making up 15% of issued claims in 2025, including cases relating to the failures of Ziglu and Lykke Corp.
Mass Consumer Litigation: An Emerging Trend?
The dominance of fraud claims takes on added significance when considered alongside the entry of mass consumer law firms bringing new litigation models into the crypto disputes space. These firms typically operate "no win no fee" models, targeting individuals who have lost over £3,000 to a scam, and appear focused initially on obtaining freezing and disclosure orders against exchanges. With over 17,000 crypto investment fraud reports submitted to Action Fraud in 2024 alone, the potential pool of claimants is substantial, and if this model gains traction, it could dramatically increase claim numbers.
FCA Enforcement: A Warning to Overseas Exchanges
While private litigation is evolving, so too is regulatory enforcement. In 2025, the FCA commenced High Court proceedings against the global cryptoexchange HTX (formerly Huobi) for alleged breaches of section 21 of FSMA, which restricts financial promotions. This marked the first enforcement action of its kind since the financial promotions regime was extended to qualifying cryptoassets in October 2023. The FCA alleges that HTX communicated invitations and inducements to engage in investment activity without authorisation, and that its promotional communications were capable of having an effect in the UK despite HTX claiming it had stopped targeting UK consumers. The case sends a clear message to overseas exchanges: merely disclaiming an intention to target UK users, without implementing robust exclusionary measures such as geo-blocking, will not be sufficient to avoid the reach of the UK's financial promotions regime.
A Focus on the Financial Ombudsman Service
Beyond litigation and regulatory enforcement, the Financial Ombudsman Service ("FOS") is a third avenue that crypto businesses should be watching closely. While the FOS does not currently have jurisdiction over pure cryptocurrency transactions, this will change when the new regulatory regime takes effect in 2027. The FOS is already considering "crypto-adjacent" complaints, and in 2025 crypto-related cases made up 3.6% of its overall caseload (1,116 out of 31,844 decisions), with 96.4% concerning frauds or scams and approximately 25% being upheld.
Crypto businesses should not regard FOS jurisdiction as someone else's problem. Several exchanges with e-money permissions already appear as respondents, and once the new regime takes effect, the FOS will have jurisdiction over exchanges' own conduct. Exchanges should consider whether their fraud warnings and interventions will stand up to the FOS' "fair and reasonable" test.
Notable Legal Developments
Underpinning all of these disputes is the evolving legal framework for how English law treats digital assets. Two legal developments from 2025 are worth highlighting for their significance to the wider digital assets ecosystem. The Property (Digital Assets etc) Act 2025 received Royal Assent on 2 December 2025, confirming that digital assets are not prevented from being treated as property merely because they fall outside the two traditional categories under English law.
However, in Ping Fai Yuen v Fun Yung Li [2026] EWHC 532 (KB), the court struck out a conversion claim relating to the alleged theft of BTC 2,323 (said to be worth £160-180 million), finding that the House of Lords' decision in OBG v Allan remained a clear block to extending the tort of conversion to digital assets. The judgment highlights that it will likely take legislation or a further appeal to broaden the common law remedies available to victims of cryptocurrency theft.
Future Outlook
Drawing together the trends above, case numbers are expected to increase in the coming years, or at least the cases coming through are likely to be more significant in terms of their impact on the ecosystem. The introduction of the new regulatory regime is on the horizon, and the FCA's action against HTX could be perceived as a "warning shot" signalling that it will take action against non-compliant crypto businesses. The growing interest of mass consumer law firms in this sector is also something to watch closely, as is the expansion of FOS jurisdiction once the new regulatory regime takes effect.
Article co-authored by Jessica Nsinga CMS London.
