As the modern world increasingly gets to grips with the legal challenges posed by the unique nature of digital assets, cases involving cryptocurrencies, NFTs and the blockchain are making more frequent appearances before the courts. However, as the recent decision in Howells v Newport City Council [2025] EWHC 22 (Ch) demonstrates, familiar concepts of ownership still have an important role to play.
Background
Mr Howells, a computer engineer from Newport, contended that in 2009 he had mined 8,000 Bitcoin. The Bitcoin could only be accessed through a private key stored in a wallet on the hard drive of Mr Howells' laptop, which was subsequently removed from the laptop and placed in a drawer in his home office. In August 2013, Mr Howells cleared out his home office and, confusing the device with another, he asked his partner to take the hard drive containing the private key to the local landfill site. Later that year the value of the Bitcoin increased significantly and Mr Howells realised the error. Mr Howells sought permission from the owner and operator of the site, Newport City Council, to access the landfill to excavate the hard drive, but this was refused. The council said that by then the hard drive was probably buried beneath 10,000 to 15,000 tonnes of waste.
Having secured investment to excavate the site, in 2024 Mr Howells commenced proceedings against the council, seeking declarations that he was the owner of the hard drive and everything on it, an order that the council either deliver the hard drive to him or allow his experts to excavate the landfill site to find it or, in the alternative, pay compensation equivalent to the value of the Bitcoin, which he contended were now worth in excess of £600 million. The council sought summary judgment on the claim, contending that it had no real prospects of success.
The decision
"This Case is not about ownership of the Bitcoin"
Traditionally the law of England and Wales has recognised just two kinds of personal property: things in possession (ie tangible property) and things in action (ie intangible property such as a debt or an intellectual property right). However, Bitcoin and other forms of cryptocurrency do not fit comfortably within either of these categories and so are now recognised as a "third category" of personal property, distinct from both things in possession and things in action. The recognition of a new category of personal property inevitably brings with it complex questions as to the relevance of possession and control to issues of ownership.
However, in the judge's view, this case was not about ownership of the Bitcoin, but rather ownership of and rights of access to the hard drive. It was plainly wrong to suggest that the Bitcoin were on the hard drive – Bitcoin and other third category property has no physical location. What was on the hard drive was, at most, a digital record of the private key. If Mr Howells had a separate record of the private key, he could still gain access to the Bitcoin. While the key was no doubt confidential information, and any use of the key by the council to gain access to the Bitcoin would be unlawful, the council did not claim such a right.
On the ownership of the hard drive
As to ownership of the hard drive, the council, as a disposal authority pursuant to the Control of Pollution Act (CPA) 1974, relied on section 14(6)(c), which provides that:
"…anything delivered to the authority by another person in the course of using the facilities shall belong to the authority and may be dealt with accordingly".
The judge accepted that this provided a complete answer to the claim. The hard drive was delivered to the landfill by Mr Howells' former partner and was delivered in the course of using the facilities. It was clear that the provision did not limit or qualify the authority's rights in the things delivered, and the suggestion that the section would not apply where someone disposes of items without the owner's consent was unarguable, even if it could be said that Mr Howells' partner acted without authority.
The judge went on to reject claims that the claimant nevertheless retained an equitable interest in the property under a constructive trust. As he noted, such a trust would be based on unconscionable retention of property, and in this case there was no realistic prospect of finding that the council's retention of the hard drive was unconscionable – the council was not retaining it for gain or because it wanted it, but rather because it was buried in landfill. It would be fanciful to suppose that the council's refusal to permit disturbance and excavation of the landfill (for which an environmental permit from the Natural Resources Body for Wales would be required) would be held to be unconscionable. Further, any such claim would appear to be barred by lapse of time.
There were no other compelling reasons for the claim to be disposed of at trial, and so the claim was dismissed.
Conclusion
Mr Howells will no doubt be disappointed by the decision in this case, particularly in circumstances where his experts considered that there was a good chance of locating and recovering the hard drive and recovering the private key if the hard drive was damaged. However, as the judge noted, in opposing the claim the council was not simply standing on its legal rights: excavation of the site could result in potentially serious risks, raising public health issues and environmental concerns.
The decision is also a useful reminder that, while the complex issues arising out of the ownership and use of digital assets are not to be underestimated, conventional principles of property law should also not be overlooked.