Court of Appeal restores Kyrrex Bitcoin after non-party challenge

The U.K. Court of Appeal has set aside a 2022 judgment that led to about 98.2 Bitcoin being taken from Kyrrex Ltd’s exchange account, ruling that a non-party with contractual rights in a wallet can be directly affected and heard. The decision gives crypto exchanges and digital asset holders clearer protection when courts target exchange wallets in fraud cases.

Why it matters: - The ruling limits how far English courts can reach into crypto exchange wallets when the exchange was never a party to the case. - The Court of Appeal said non-parties with rights in a wallet may be directly affected and entitled to be heard before assets are taken. - The decision is likely to shape future fraud-recovery orders involving digital assets and exchange custody arrangements.

What happened: - The Court of Appeal in London set aside a 2022 summary judgment in Jones v Persons Unknown [2026] EWCA Civ 1212, Case No: CA - 2025 - 001599. - The appeal was brought for Kyrrex Ltd by The Brooke Law Group LLP. - The judgment had resulted in about 98.2 BTC being debited from a wallet in which Kyrrex held rights. - Kyrrex was never a party to the original proceedings. - None of Mr Jones’ Bitcoin was ever traced to Kyrrex’s wallet. - The appeal was heard by Peter Jackson, Nugee and Foxton LJJ.

The details: - Mr Jones won summary judgment in 2022 against persons unknown and the Huobi exchange after a Bitcoin fraud. - Huobi satisfied the judgment by debiting a wallet linked to Kyrrex’s rights. - Kyrrex applied under CPR r 40.9 to set aside the judgment. - The High Court refused in 2025, saying Kyrrex was only indirectly affected and should pursue any remedy against Huobi. - The Court of Appeal reversed that ruling. - The court held that a non-party can be directly affected through contractual rights alone, without a proprietary interest. - The court also held that an order aimed at a specific wallet directly affects whoever is actually interested in that wallet. - The Court of Appeal said the key question was whether the order should have been made at all, not whether Kyrrex could bring a separate recovery claim. - Peter Jackson LJ said the order had made Kyrrex "the unwitting insurer of the claimant's loss," at paragraph 151. - The court will decide consequential issues, including security for the Bitcoin, later. - Kyrrex was represented by The Brooke Law Group LLP, with Brad Pomfret KC of 23 Essex Street, Mark Lorrell of Millennium Chambers and Ian Chai of Hailsham Chambers.

Between the lines: - The decision pushes back on a practice that has become common in crypto fraud cases: fast freezing and delivery-up orders against exchange wallets, often without a hearing for affected parties. - The ruling signals that courts may need to look more carefully at who controls or benefits from a wallet before ordering transfer of assets. - For exchanges, the case strengthens arguments for being heard when court orders reach assets they hold or control for customers.

What's next: - The court will deal with consequential matters, including security for the Bitcoin, in due course. - Crypto exchanges and litigants are likely to rely on the ruling in future applications involving person-unknown fraud claims and wallet-based remedies. - The Brooke Law Group invited readers to learn more about its disputes and digital assets practice at more information.

The bottom line: - The Court of Appeal gave crypto exchanges a stronger procedural shield when courts try to seize assets from wallets tied to non-parties.