In brief
- The UK's Court of Appeal (Criminal Division) has held that virtual in-game currency (here, "gold pieces") in the online mobile game, Old School RuneScape, constitutes property capable of being stolen for the purposes of the UK's criminal offence of theft.
- The decision also considered civil law treatment of in-game digital assets. In non-binding obiter remarks, the court found that the gold pieces could fulfil the four criteria necessary for civil law property rights to arise, as they are definable, identifiable, capable of assumption by third parties, and possess permanence and stability.
- Whilst unnecessary for determining whether theft arose in this case, the court also classified the gold pieces as "rivalrous" a specific legal term and key characteristic of property under both civil and criminal law – primarily on the basis that only one player can use them at a time. In a decision that might surprise many people in the games industry, the court rejected the argument that the developer's power to modify or delete the virtual currency undermines this property-like feature.
- Whilst this criminal law case has no direct consequences for free-to-play games companies, it represents a further example of increased scrutiny by courts, legislators and regulators of monetisation involving virtual currency.
The criminal law case
The Court of Appeal (Criminal Division) handed down judgment in R v Lakeman in January 2025, concerning the alleged theft of approximately 705 billion gold pieces worth £543,123 from players' accounts in relation to the mobile game, Old School RuneScape. The defendant, a content developer employed by the game's UK-based developer and publisher, Jagex Ltd, was accused of hacking into 68 player accounts and selling the stolen virtual currency in exchange for Bitcoin. It is important to note that Jagex was itself a victim of Mr Lakeman's actions and was not the subject of this prosecution or a party to the proceedings.
Old School RuneScape is an online role-playing mobile game where players can accumulate gold pieces to improve their character's position in the virtual world of Gielinor. Whilst gold pieces can be transferred between players within the game, Jagex's game rules expressly prohibit real-world trading of gold pieces outside the game environment. Nevertheless, gold pieces are illegally bought and sold outside the game for real money on online marketplaces that are not authorised by Jagex.
The court emphasised that "property" has different definitions in different contexts and need not meet civil law criteria to constitute property for criminal law purposes. Adopting a broad interpretation of the Theft Act 1968, the court held that for something to be "property", it requires only that the thing is: (1) freely bought and sold and (2) capable of being the subject of dishonest dealing which would deprive the owner of its benefit. The court allowed the prosecution's appeal on the preliminary issue, holding that the virtual gold pieces are property capable of theft.
Civil law implications: the Ainsworth criteria
Whilst the case concerned the status of the virtual gold pieces for the purposes of potential criminal liability under the Theft Act 1968, the court's obiter discussion of whether those pieces could constitute property under civil law represents a potentially significant development in the treatment of in-game virtual currency and digital assets. In relation to the civil law question (which was not legally binding), the court examined the four "Ainsworth" criteria (which are often taken as the starting point for determining whether something constitutes property for the purposes of civil law, as per the House of Lords' decision in National Provincial Bank v Ainsworth): property must be definable, identifiable by third parties, capable of assumption by third parties, and have some degree of permanence or stability.
We discussed these key requirements in our previous article regarding digital asset ownership under the Property (Digital Assets etc) Act 2025. The Act does not confirm the status of any particular digital asset as giving rise to civil personal property rights but leaves scope for courts to make such determinations. If civil proprietary rights are held to subsist in things like virtual gold pieces, there will likely be considerations in due course over whether games may become subject to statutory regulatory regimes, including oversight by the Financial Conduct Authority.
The court's view was that the gold pieces fulfilled the Ainsworth criteria: they are clearly definable and identifiable, transferable within the game (notwithstanding Jagex's power to revoke them under its End User Licence Agreement and players are free to transfer them within the rules of the game until that point), and possess the necessary permanence and stability. The court rejected the argument that Jagex's ability to withdraw or destroy the gold pieces means they lack permanence, noting that only a small degree of permanence is required – even a melting ice lolly or burning match counts as property. The court's analogies are arguably questionable and insufficiently explained. As the civil law point was not central to the case and it was being dealt with in a criminal law context, the judges may have reached a more nuanced view with the benefit of considering more relevant authorities, expert evidence and fuller arguments on the point.
Ultimately, the court's obiter decision on whether gold pieces should be considered as property for civil law purposes came down to discussion of the concept of "rivalrousness".
The crucial civil law concept of "rivalrousness" for virtual property
Following emphasis in the Law Commission Final Report on Digital Assets and in the Court of Appeal's decision on cryptocurrencies in Tulip Trading Ltd v Bitcoin Association, rivalrousness has become increasingly important in determining whether digital assets constitute property. Generally, property must be both rivalrous and capable of assumption by a third party. A thing is rivalrous if use by one person necessarily prevents use by another.
The court determined that the gold pieces are rivalrous because their use by one player necessarily prejudices their use by others – if consumed by player A they cease to exist, and if transferred to player B they are unavailable to anyone else.
Critically, the court rejected the argument that Jagex's ability and contractual right to alter gold piece holdings defeats rivalrousness. The court did not fully explore this point in a video games context or provide a fully reasoned opinion on the point, but drew analogies to real-world property: a coin remains property despite the Bank of England's ability to recall it, and a hired car remains rivalrous in the hirer's hands despite the owner's ability to terminate the contract. In the court's view, gold pieces are rivalrous in the player's hands, notwithstanding Jagex's power to withdraw them or create unlimited pieces.
In addition, the Court of Appeal firmly rejected the trial judge's reasoning that digital assets need "uniqueness" to qualify as property, noting that no such requirement applies to physical property. For example, a PS5 controller is not unique, but it is still property. In the Court of Appeal's view, whether it be a virtual gold piece or a physical PS5 controller, one person has control over it, preventing someone else from using it. The court also rejected the argument that gold pieces cannot be property simply because new players can acquire their own wealth separately – what matters is whether a particular player's existing gold pieces are rivalrous at the time they hold them, not whether other players can separately acquire different assets in the future.
The future characterisation of virtual currency and assets
The court's decision follows the UK's recent Property (Digital Assets etc) Act 2025 of last December, which creates a statutory framework for potentially recognising digital assets as personal property – or at least clarifying that the mere fact that they do not fall into the traditional categories of property, does not mean that they cannot be regarded as property in certain circumstances. It also lands in the context of the ongoing debate in the EU over the CPC Network's Key Principles on In-Game Virtual Currencies and in the US following the Washington Attorney General's action against certain social casino companies with the allegation that their virtual currencies constitute a "thing of value" for the purposes of local gambling regulations.
As such, the court's somewhat surprising finding that Old School RuneScape gold pieces fulfil both the Ainsworth criteria and the emerging definition of rivalrousness is another shot against the bows of an embattled industry with the risk that a future, binding decision could recognise virtual currency as a form of property in civil law.
The court did note that the Law Commission had provisionally concluded that in-game assets such as gold pieces would not satisfy the necessary criteria for property, but also noted that the Law Commission had expressed no firm conclusions on this point, and stated that the law needed to be flexible to respond to technological change. The court failed to engage with an argument from the respondent's counsel relating to some of the consequences if the court's decision were found to be true: including, for example, virtual currency potentially falling within the FCA's anti-money laundering regime. The court dismissed this as not relevant to the criminal case, but this would just be one of many serious problems for the entire free-to-play games industry, if virtual currency were found to be property.
For players, developers and platforms operating in the virtual economy, this case is another warning of the legal and regulatory threats coming for free-to-play monetisation. There is a real risk that virtual currency could increasingly be treated as analogous to property under English law. Game developers and publishers whose business has a significant exposure to virtual currency should continue to keep abreast of developments in this area and explore ways to de-risk their businesses.
How Mishcon de Reya can help
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