Introduction

The High Court’s recent decision in Howells v Newport City Council [2025] EWHC 22 (Ch) provides further judicial clarification on the legal treatment of bitcoin and related digital assets. While the case was ultimately decided on questions of ownership of a discarded hard drive, it raises wider issues about how English law conceptualises digital assets and, in particular, the role of private keys. The judgment is a useful lens through which to examine the evolving legal framework for cryptocurrencies and the limits of existing property law in accommodating new technologies.

Factual Background

In 2013, Mr Howells inadvertently disposed of a hard drive containing the private key to approximately 8,000 bitcoins he had mined in 2009. The hard drive ended up at the Docksway Landfill Site, owned and operated by Newport City Council. As the value of bitcoin soared, Mr Howells sought permission from the Council to search the site and recover the device, which he claimed was the only means by which he could access the bitcoin. When his requests were refused, he brought proceedings seeking either recovery of the hard drive or compensation for the value of the inaccessible bitcoin. The claim was dismissed at the summary stage.

Defining Property for Digital Assets

A key issue arising from the case is the classification of digital assets as property. English law traditionally recognises two forms of personal property: tangible property (things in possession) and intangible property (things in action). Bitcoin does not neatly fall into either category. Nevertheless, the courts have increasingly accepted that cryptocurrencies are a distinct form of property. The judgment in Howells, following earlier decisions such as Tulip Trading [2023] and D’Aloia v Persons Unknown [2022], affirms that bitcoin is capable of being owned and protected as property under English law.

Judge Keyser KC endorsed the position taken by the Law Commission in its Final Report on Digital Assets, namely that certain digital assets constitute a “third category” of personal property. This approach reflects the unique nature of cryptocurrencies, which, while lacking physical form and not constituting legal claims, nevertheless exhibit characteristics—such as transferability and exclusivity of control—traditionally associated with property rights.

The Legal Nature of Private Keys

The more difficult question in Howells was the status of the private key stored on the hard drive. The Court drew a clear distinction between the bitcoin (the digital asset) and the private key (the means of access). It rejected the notion that bitcoin could be said to reside “on” the hard drive; rather, the bitcoin existed independently on a decentralised ledger, and the private key merely enabled access to it.

The Court compared the private key to information - comparable to a password written on a piece of paper. While the key was necessary to exercise control over the bitcoin, it was not itself the property. Accordingly, the hard drive was treated as a chattel containing information, not as a container of the bitcoin itself. This distinction proved decisive. Since the Council lawfully acquired the hard drive under waste disposal legislation and had no obligation to assist in its recovery, the Claimant’s proprietary claims failed.

Conclusion

Howells v Newport City Council serves as a cautionary tale about the legal and practical risks involved in the storage of digital assets. While the judgment confirms that bitcoin is recognised as property under English law, it also underscores the difficulties in applying traditional legal principles to the hybrid nature of digital asset storage. The court reinforced the view that access mechanisms - such as private keys - are not property themselves, but tools for exercising control over property. As digital assets become increasingly mainstream, further legal developments will be needed to bridge the conceptual and practical gaps exposed by cases like Howells. At the same time, digital asset holders must remain alert to the legal limitations surrounding asset recovery.

At Economou & Co LLC, we are well-placed to advise on complex legal disputes involving digital assets, drawing on our expertise in this evolving area of law.