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UK High Court Rules Chinese Law Governs Claims to Seized $5B Bitcoin Haul

Victims of fraudster Zhimin Qian's Ponzi scheme plan to appeal; English law had been seen as more favorable to their claims

By LineZotpaper
Published
Read Time2 min
Sources3 outlets
The UK government's chances of keeping a 61,000 Bitcoin haul worth about $5 billion seized from convicted fraudster Zhimin Qian have improved, after the High Court in London ruled that Chinese law applies to victims' claims to the coins. Lawyers for the victims, who had hoped English law would help them recover their losses, plan to appeal.

The UK government has moved closer to keeping a Bitcoin haul worth about $5 billion after the High Court in London ruled that Chinese law, not English law, should govern claims by victims to the coins.

Justice Mark Turner's ruling applies to 61,000 BTC seized from Zhimin Qian, convicted last year on fraud and money laundering charges over a Ponzi scheme that defrauded investors in China between 2014 and 2017. At the current price of around $83,200, the stash is worth roughly $5 billion.

Thousands of victims have applied under the Proceeds of Crime Act to have parts of the Bitcoin declared theirs. Each must show a proprietary interest in the coins, Justice Turner wrote, because the law creates no broader compensation scheme for people who lost money to crime.

English law had been seen as substantially more favorable to the victims, the Financial Times reported, because it could have allowed them to argue the Bitcoin belonged to them. The content of Chinese law, and how it applies to the victims' claims, will be decided at a later stage.

According to the ruling, at least 128,409 investment contracts were entered into, and victims paid in about RMB 40.2 billion, roughly £4.1 billion. About RMB 34.1 billion of that was paid back out to some victims.

Lawyers for the victims plan to appeal the decision.

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Analysis

Why This Matters

  • The ruling decides who controls roughly $5 billion in Bitcoin: the UK state or thousands of investors who lost money to Qian's scheme.
  • It removes an advantage victims were expected to gain under English law, changing the outlook of the case mid-litigation.
  • The decision offers a reference point for how courts handle crypto seized in cross-border fraud, where victims, criminals and assets can span multiple legal systems.

Background

The 61,000 BTC was seized from Zhimin Qian, who was convicted over a Ponzi scheme that operated in China between 2014 and 2017, taking around RMB 40.2 billion from investors. Thousands of victims then applied under the UK's Proceeds of Crime Act to claim parts of the haul. Under that law, property forfeited to the state can only be recovered by people who demonstrate a proprietary interest in it, so the question of which country's law defines that interest is central to the case.

Key Perspectives

UK government: The ruling improves its position to retain the Bitcoin as criminal proceeds forfeited to the state. Ponzi scheme victims: They hoped English law would let them argue the coins belonged to them, and their lawyers plan to appeal. Critics and skeptics: The substance of Chinese law has not yet been determined, so the final outcome remains open, and the appeal could reverse the decision.

What to Watch

  • The victims' appeal, which could uphold or overturn the High Court's choice of governing law.
  • Later proceedings that will determine what Chinese law says about victims' rights to the coins.
  • Whether courts in other jurisdictions adopt a similar approach to crypto assets seized in cross-border fraud cases.

Sources

Zotpaper

Written by software from the reporting listed above, scored by an automated standards desk, and published without a person reading it first. If something here is wrong, tell the editor and it will be put right.

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