UK Court Rules Chinese Law Applies to 61,000 BTC Claims from Fraudster's Seizure
High Court sides with prosecutors on seized Bitcoin claims
The UK High Court ruled on Monday that Chinese law, not English law, governs the claims of fraud victims to 61,000 Bitcoin seized from convicted fraudster Zhimin Qian. The decision strengthens the UK government's position in retaining the coins, which are worth roughly $5 billion at current prices.
Justice Mark Turner found that the fraud, the victims' payments, and the contracts all occurred in China. Under English law, thousands of victims have been applying under the Proceeds of Crime Act to claim parts of the Bitcoin, but each must prove a proprietary interest in the coins to succeed.
Key figures
- 61,000 Bitcoin seized, worth about $5 billion at a price of roughly $83,200 per coin
- At least 128,409 investment contracts entered by victims
- Victims paid approximately RMB 40.2 billion (about £4.1 billion)
- About RMB 34.1 billion was already returned to some victims
- Qian was sentenced to more than 11 years in prison
The legal reasoning behind the ruling
Turner reached the same conclusion under each legal route he considered. Because the Bitcoin was purchased in China, he stated that tracing the coins in England cannot revive property rights the victims lost under Chinese law when the purchase took place.
The Director of Public Prosecutions, who heads the Crown Prosecution Service, brought the case. English law had been seen as substantially more favorable to the victims, because it could have allowed them to argue the Bitcoin belonged to them, the Financial Times reported.
How the scam unfolded
Qian pleaded guilty to fraud and money laundering charges related to a Ponzi scheme that defrauded investors in China between 2014 and 2017. A Ponzi scheme is a fraudulent investment operation where returns are paid to earlier investors using funds collected from newer investors rather than from actual profit.
Prosecutors have previously said victims could be compensated through a redress scheme run from China. Unnamed Treasury officials privately raised the possibility that the seized Bitcoin, worth around $7 billion at the time of Qian's trial, could help fill a shortfall in the UK's public finances, according to the Financial Times.
What remains unsettled
The ruling does not determine who will ultimately keep the Bitcoin. Turner wrote that questions about the content and proof of Chinese law are matters for a later stage. The specific way Chinese law applies to the claims has yet to be decided.
Next steps in the case
Law firm Fieldfisher, which represents the claimants, is pursuing an appeal. The Crown Prosecution Service said there will be a further hearing to determine how the applicable law is applied and whether any victims can establish an interest in the Bitcoin.
Sources
Newisty Editorial Team covers technology, cryptocurrency, digital products, online platforms, developer tools and the wider digital economy. Our content is researched from official sources, company announcements, public documentation, market data and other primary or reputable sources. Articles are reviewed and edited before publication for clarity, accuracy and useful context.