R v Lakeman: When Virtual Gold becomes Real Money.

Can you steal something that doesn’t exist in the material world?

That was what the Court of Appeal had to decide in the recent case of R v Lakeman [2026] EWCA Crim 4, ruling that ‘gold pieces’ used as virtual currency within a video game could constitute property within the meaning of section 4 of the Theft Act 1968 (‘Theft Act’).

As well as marking a major pivot in the criminal law, the Court’s discussion of private law definitions of ‘property’ means that the case is likely to have implications for how virtual assets are treated in civil proceedings too.

Background

The case concerned a video game called ‘Old School RuneScape’, in which players can accumulate in-game wealth in the form of gold pieces. These gold pieces are earned by performing tasks or through trading with other players, and can be used to purchase other valuable items within the virtual universe such as cloaks and amulets.

However, what players cannot do is sell their gold pieces outside the game. Despite the game’s developer, Jagex Ltd (Jagex), setting out this prohibition in the game’s rules, gold pieces are routinely traded by players outside of the game for fiat currency or cryptocurrency.

Mr Lakeman worked for Jagex as a content developer. Over the course of his employment, Mr Lakeman gained entry to the accounts of 68 players and stripped them of the gold pieces held within them. Many of these accounts held notable in-game wealth, which Mr Lakeman proceeded to sell to buyers outside the game for approximately £543,123 Bitcoin and fiat currency.

Mr Lakeman was charged with theft under the Theft Act 1968.

At a preliminary hearing in the Crown Court, Mr Lakeman as Defendant succeeded in his application to dismiss the theft charge. The Judge reasoned that because one player’s use of the gold pieces did not exclude another player from using them, the gold pieces lacked the “rivalrousness” required to be property. The gold pieces were therefore more akin to pure information, which cannot be stolen under English law.

The Court of Appeal Decision

The Court of Appeal disagreed with the conclusion of the Crown Court Judge, holding that the gold pieces were in fact property that could be the subject of the offence of theft.

Reversing the decision of the trial Judge, the Court of Appeal deemed the gold pieces as identifiable and valuable assets capable of dishonest trading and deprivation, which are captured by the deliberately wide definition of property found in the Theft Act:

““Property” includes money and all other property, real or personal, including things in action and other intangible property.”

Criminal vs Civil

The Court emphasized that the task before them was not to define what property is, as the meaning of property depends on its statutory context.  It is immaterial that what may constitute property under the criminal law may not be regarded as property under the civil law, as the two branches of the law serve different purposes.

The Court used the example of illegal drugs to illustrate this point, as such drugs are property within the meaning of the Theft Act to deter thefts among those involved in the drug trade, even though to recognize them as property for purposes of property rights enforcement under the civil law would be contrary to public policy. The two seemingly conflicting approaches to tangible property can exist simultaneously when the purposes of each area of the law are acknowledged. The Court therefore concluded that a virtual currency could constitute property for the purposes of the Theft Act even if it did not fulfil the criteria for property under civil law.

Rivalrousness and the Ainsworth Criteria

The Court held that a finding of rivalrousness, a civil law concept, was not required for the gold pieces to be deemed property in the criminal context.

Nonetheless, the court rejected the trial Judge’s analysis and found that the gold pieces were in fact rivalrous. They were identifiable assets allocated to different accounts which were capable of transfer from one player in a way that deprived that player of their use and value. The trial Judge’s assignment of the gold pieces as pure information was therefore erroneous.

One part of the judgment that is particularly significant in the civil law arena is the Court’s discussion of the Ainsworth criteria, which is often taken as the starting point for deciding what constitutes property in private law.

Despite confirming that satisfaction of the criteria was not required for property under the Theft Act to be made out, the Court proceeded to apply the criteria to the gold pieces.

Under the Ainsworth criteria, property must be:

1.      definable,

2.      identifiable by third parties,

3.      capable in its nature of assumption by third parties; and

4.      have some degree of permeance or stability.

The Court found that the gold pieces fulfilled each of these criteria.

In finding that the gold pieces met the Ainsworth criteria, as well as the definition of rivalrousness, the Court not only strengthened the gold piece’s property status in the criminal law but opened the door for future civil proceedings in which proprietary rights could be enforced over virtual currency.

Key Takeaways

Whilst R v Lakeman is, at its core, a criminal case, the civil law implications of the judgment should not be understated. The Court of Appeal’s endorsement of the gold pieces as property for the purposes of the civil law is a shift towards virtual currencies being treated as functional and valuable assets rather than mere information.

Nonetheless, the Court was clear that virtual assets must be assessed on a case-by-case basis, and that whether a virtual currency is deemed property under the civil law would depend on the relevant asset’s architecture.

When the implications of virtual currency constituting property are considered, it is easy to understand why the Court offered no firm conclusion. Should virtual currency become property, platform-user disputes would move beyond the developer’s terms and conditions into the domain of proprietary ownership and change the relationship between players and developers in a significant way.

Until such a civil case arises, however, the legal position of virtual currencies in the material world remains inconclusive.