In DPP v Surin [2025] EWHC 10 (KB) the High Court granted a recovery order under Part 5 of PoCA 2002 in relation to 78.22545 Bitcoin held in a wallet associated with an account operated by Coinbase (‘the account’), valued at some £3.5m.
A recovery order is an order that the High Court must make if, in proceedings under Part 5 of PoCA 2002, the Court is satisfied that any property is recoverable.
Recoverable property is defined in s.304(1) of PoCA 2002 as “Property obtained through unlawful conduct…” and property is defined in s.316(4)(c) as “all property wherever situated and includes – (a) money, (b) all forms of property, real or personal, heritable or moveable, (c) things in action and other intangible or incorporeal property.”
In Director of Public Prosecutions v Briedis [2021] EWHC 3155 (Admin), Fordham J observed that “It would be a serious lacuna if cryptoassets fell outside the reach of this statutory scheme” and held that “…cryptocurrency, as cryptoassets, fall within the wide definition of "property" in section 316(4)(c)…”
As part of a criminal investigation into a conspiracy to import and supply large quantities of Class A drugs, dubbed Operation Carter, law enforcement officers forensically examined encrypted chat messages and recovered what they believed to be ‘seed words’. Using the seed words, officers obtained a list of transactions associated with the wallet from the blockchain and upon inspection of the list, identified an account held by the Defendant.
The DPP asserted that the Bitcoin in the account was the proceeds of unlawful conduct including drug trafficking, fraud and/or money laundering.
The Defendant had extensive convictions for drug trafficking, fraud and money laundering in the UK, Belgium and France. The Defendant had previously been the subject of civil recovery proceedings in the UK. In 2009, a multi-million-pound property freezing order was granted and in 2015, a recovery order was made resulting in the recovery of assets worth approximately £4.5m. Separately, the Defendant had previously been the subject of cash forfeiture orders in the UK. In 2005, more than £200,000 was forfeited and in 2009 almost £850,000 was forfeited. The Defendant was also the subject of an expired Interpol ‘Red Notice’ in relation to a drug trafficking conviction in France.
The transfers into the account were said to be from an individual who had been convicted in 2007 in Portugal for involvement in the supply of 2000 kilograms of cocaine and who had pleaded guilty in the criminal prosecution that gave rise to the civil recovery investigation into the account, receiving a sentence of imprisonment of 17 years.
On 28 June 2022, following an ex parte application by the Claimant, the High Court granted a Property Freezing Order under s245A of PoCA 2002 in respect of the account. Thereafter, a civil recovery investigation commenced, and the Claimant applied, successfully, for a Production Order against Coinbase under s.345 PoCA 2002 in respect of records which might identify assets held by the Defendant.
The DPP issued its claim under CPR Part 8 on 24 March 2023. The Defendant acknowledged service on 31 March 2023; however disputed jurisdiction, contending that because the proceedings involved substantial disputes of fact, CPR Part 8 was inappropriate, and the claim should have issued under CPR Part 7.
The Claimant made an application for summary judgement on 11 July 2023, at which time the Defendant had still not filed any evidence. At a Directions hearing on 07 December 2023, the Court adjourned the application for summary judgement and made an unless order requiring the Defendant to serve evidence in response by 11 January 2024 or be debarred from doing so.
The Defendant complied with the Unless Order and the parties exchanged further evidence in advance of a further directions hearing on 16 February 2024, at which the Court listed the application for summary judgement for hearing on 15 July 2024. The parties subsequently exchanged further evidence, and the Defendant filed a strike out application.
The High Court, with little difficulty, granted the DPP’s application for summary judgement of its Part 8 claim and made an order vesting the property in the trustee for civil recovery pursuant to s.266 of PoCA 2002.
Mr. Justice Mould adjudged that the Claimant had established, at the very least, a credible case that the Bitcoin in the account was recoverable property and that the Claimant had a strongly arguable case on the evidence before the Court. Conversely, Mr. Justice Mould commented that the Defendant’s case lacked any degree of credibility and raised no genuinely triable issue. Mr. Justice Mould concluded that the Defendant enjoyed no realistic prospect of defending the claim and that there was no other compelling reason for a trial.
At first blush, it might be considered that this case marks a new dawn for enforcement authorities demonstrating their willingness to seek high value recovery orders and to pursue aggressive litigation tactics, including applications for summary judgement; however, it seems more likely that the DPP was encouraged and indeed emboldened by the exceptional factual matrix and the Defendant’s litigation conduct.
Nevertheless, the case is notable for several reasons.
First, the identification and recovery of cryptoassets. The case reveals the increased proficiency of enforcement authorities in identifying and tracing cryptoasset accounts through Blockchains as well as the willingness of enforcement authorities to litigate high value civil recovery matters in the High Court. It is worth noting, carefully, that in civil recovery proceedings before the High Court, the balance of proceeds are paid to the enforcement authority whereas in civil recovery proceedings before the Magistrates’ Court, the balance of proceeds is paid into the consolidated fund.
Second, the Defendant’s attempt to dispute jurisdiction. The practice direction on civil recovery proceedings states, at 4.1, “A claim by the enforcement authority for a recovery order must be made using the CPR Part 8 procedure.” Accordingly, the Defendant’s jurisdiction dispute was misguided and doomed to failure from the outset.
Third, the lapse of time between the issuing of the claim and the handing down of summary judgement. The judgement of the High Court was handed down remotely on 03 January 2025, more than 21 months after the claim was issued by the DPP in March 2023. It is unlikely that enforcement authorities will have an appetite for lengthy and costly High Court litigation, other than in the most exceptional circumstances.
If you have received notification of a civil recovery claim under Part 5 PoCA 2002 or of other proceedings under PoCA 2002, we can help. Defending claims under Part 5 PoCA 2002 is a niche area of legal practice, in which few lawyers specialise. Our subject matter experts can help you navigate the web of law and procedure efficiently and work with you to mitigate the financial and reputational damage such claims can cause.
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If you require assistance with issuing or defending a civil recovery claim under Part 5 of PoCA 2002 or in relation to any other proceedings under PoCA 2002 and are interested in finding out how we can help, please contact our business crime team on info@ilaw.co.uk or call +44 (0)203 987 0222.
