Most courts that have addressed the question treat cryptocurrency as property for civil litigation purposes, even though it exists only as cryptographic control over an entry on a public ledger, which puts conversion at the center of the field. Unauthorized transfers, exchange hacks, social-engineering theft, insider misappropriation, raise a problem ordinary conversion doctrine was not built for: recovery ultimately depends on tracing pseudonymous transactions across a public blockchain and identifying a defendant who is both reachable by the court and worth a judgment, so litigation strategy here is inseparable from asset-tracing capability in a way most property disputes are not. This is a distinct question from whether a particular token is also a security, a separate and often contested classification fight this practice area treats as a threshold issue the parties may dispute, rather than one it resolves.

Custodial relationships add their own layer of dispute. A centralized exchange's terms of service typically characterize its obligation to customers as either a debtor-creditor relationship or a true bailment, and that characterization determines whether customer assets are shielded from the exchange's own creditors if the exchange becomes insolvent, an issue that moved to the center of the field after several high-profile platform failures. Smart-contract disputes present a different fight entirely: a defendant may invoke the code's literal execution as a complete defense, the outcome the code actually produced, against a claim that the result did not match what the parties actually agreed to, and courts have generally shown willingness to look past the bare code to the parties' underlying intent. Non-custodial wallet losses, lost keys, phishing, can leave no institutional defendant at all, only the counterparty who ultimately received the transferred assets.

Valuation volatility is its own strategic variable here in a way it rarely is in ordinary conversion cases: the price of a digital asset can move dramatically between the date of conversion, the date of filing, and the date of judgment, so the valuation date chosen can swing damages far more than liability itself. Asset traceability and jurisdiction over a reachable defendant function as a practical threshold, since a technically strong conversion claim against an anonymous or judgment-proof defendant has little real value. An exchange's insolvency can transform what looked like a straightforward custodial-breach claim into a bankruptcy priority fight over whether customer assets were ever property of the customer at all, or became property of the estate the moment they were deposited.