Judge should not have ordered payment of costs in Bitcoin, suggests Court of Appeal

Order was also wrong to specify where the money should come from

It is “very doubtful” that a deputy High Court judge should have ordered the payment of costs in Bitcoin, the Court of Appeal has said.

Lord Justice Nugee was also unhappy that the costs order was made against two parties but effectively directed a third party to pay it.

In Jones v Persons Unknown [2026] EWCA Civ 1212, Gary Jones brought proceedings seeking to recover Bitcoin of which he had been defrauded. He applied for summary judgment, which was granted by Nigel Cooper KC, sitting as a deputy High Court judge.

His order among other things required the fourth defendant, a Seychelles company called Huobi Global, to transfer 98.2 Bitcoin from a wallet under its control (the ‘tHEL wallet’) to a wallet nominated by Mr Jones.

Huobi did this and then debited the 98.2 Bitcoin from the account of Kyrrex, a company registered in St Vincent and the Grenadines, which had an interest in the tHEL wallet.

Kyrrex had not been party to the proceedings and applied to be joined as a defendant and to have the order set aside on the basis that the Bitcoin which Huobi had transferred were not in fact Mr Jones’s Bitcoin and that there was no connection with the fraud on Mr Jones.

This application was dismissed by His Honour Judge Richard Pearce, sitting as a High Court judge, but the Court of Appeal allowed Kyrrex’s appeal.

On costs, Judge Cooper’s order provided at paragraph 8 that the first and second defendants – unknown people involved in the fraud – should pay the claimants costs, which he summarily assessed at £148,000.

Paragraph 9 said payment of the costs “shall be undertaken by the first, second and fourth defendants transferring 8.63532665 Bitcoin from the tHEL wallet to the nominated wallet”.

In a “footnote on costs”, Nugee LJ said the practical effect of this order “was to impose an obligation on Huobi to discharge the costs, and to do so from a particular source”.

He went on: “We heard no argument on the point but I think this a most unusual provision. An order for costs is a money judgment, and in general a court does not tell a defendant who has been ordered to pay money where the money is to come from.

“It was no doubt an ingenious attempt to avoid the problem that the first and second defendants had not been, and were unlikely to be, identified and so enforcement of the costs order by any of the ordinary methods would be likely to be impossible, but it involved the risk, which has unfortunately materialised, that the Bitcoin in the wallet would turn out not to belong to the first and second defendants at all and the costs would therefore be borne by someone innocent of the fraud.

“It also incidentally imposed a positive obligation on Huobi that could in theory be enforceable by committal despite the fact that money judgments in general cannot be, and the fact that the costs order was not made against it anyway.”

There was also no argument during the hearing on requiring the costs liability to be discharged in Bitcoin. “This too seems to me a most unusual provision,” said the judge. The general rule was that costs should be awarded in the currency in which a party has paid, or is liable to pay, his solicitors; that appeared here to be sterling.

“It seems to me very doubtful whether this [ordering payment in Bitcoin] was appropriate,” Nugee LJ said. “Mr Cooper appears to have done this without being referred to any of the relevant material.”

Miliangos v George Frank (Textiles) Ltd [1976] AC 443 permitted court orders to be made for the payment of sums in currencies other than sterling, “but in my view clearly contemplates that orders for payments which are not in sterling will be in a foreign currency”, Nugee LJ went on.

“English law treats cryptocurrency as a form of property, but it would be a very significant step to treat them as money (and we do not order costs orders to be discharged through the transfer of property).”

He cited the Law Commission’s 2023 report on digital assets, which said cryptocurrencies were unlikely to be treated as money.

The commission said: “As with Miliangos, we think that, if it so desired, a court could potentially exercise its discretion to award a ‘monetary’ remedy denominated in (certain types of) crypto-tokens in certain circumstances, namely where doing so would provide a better reflection of the innocent party’s loss. However, we acknowledge that, on its face, this would be a novel step.”

Nugee LJ continued: “Given this background I am very doubtful if a court should order payment of costs in Bitcoin or other cryptocurrency without the point having been fully argued.”

Here, it could have had the effect of over-compensating Mr Jones. The exchange rate used for conversion into Bitcoin was taken at one Bitcoin to £17,194 but the order did not require Huobi to transfer the Bitcoin until 14 days later – and in fact it did not do so for a further week.

“By then the value of Bitcoin might have risen significantly such that the net amount received by Mr Jones in respect of costs would exceed the £148,000 that had been assessed. None of this seems very satisfactory.

“On both these grounds I think it is open to real doubt whether the court should have made the order in the form of paragraph 9. I do not propose to resolve the question in the absence of any argument but I do not wish to be taken to endorse the form of order here used.”