A ruling by a UK court on Bitcoin has made it harder for fraud victims to reclaim the 61,000 BTC taken from Zhimin Qian, boosting the odds that the UK government will keep the stash. On Monday, London’s High Court determined that Chinese law applies to the claims, though it left unresolved the question of who actually owns the coins.
Key takeaways
- Chinese law governs victims’ claims to the seized Bitcoin.
- The court requires claimants to establish property rights, not simply fraud losses.
- Ownership remains unresolved, and victims’ lawyers plan to appeal.
According to Decrypt, the seized Bitcoin was valued at approximately $5 billion, using CoinGecko data showing a price of about $83,200 per BTC. CoinDesk reported that London’s Metropolitan Police seized the coins during its investigation into Qian, and put their sterling value at about £3.8 billion.
UK court’s Bitcoin ruling turns on where the fraud occurred
Chinese law applies because the fraud, investment contracts and victims’ payments all occurred in China. Justice Mark Turner sided with the Director of Public Prosecutions, the official who leads the Crown Prosecution Service and initiated the case.
Victims had sought to use English law to establish property rights over the Bitcoin. Turner rejected that route and reached the same conclusion across each legal approach he examined.
The judge also found that the Bitcoin had been purchased in China. Tracing those coins in England, he explained, cannot restore property rights that victims lost under Chinese law when the purchase occurred.
The Ponzi scheme behind the seizure
Qian pleaded guilty to fraud and money laundering over a Ponzi scheme targeting investors in China between 2014 and 2017. She received a prison sentence of more than 11 years.
According to the ruling, the scheme involved at least 128,409 investment contracts. Victims paid approximately RMB 40.2 billion, roughly £4.1 billion, while about RMB 34.1 billion was paid back to some victims before this ruling.
CoinDesk reported that Qian operated the scheme through Tianjin Lantian Gerui Electronic Technology, defrauding more than 128,000 investors. She converted stolen funds into Bitcoin and fled to Britain in 2017.
Victims must establish ownership rights to recover Bitcoin
Thousands of victims have submitted claims under the Proceeds of Crime Act, but each must demonstrate a proprietary interest in the coins. Turner explained that the legislation does not provide a general compensation scheme for everyone who suffers losses from crime.
The UK court’s Bitcoin ruling settles the governing-law question, not ownership. Turner reserved questions about the content of Chinese law, how it must be proved and its application to the claims for a later stage.
Prosecutors have previously said victims could receive compensation through a redress scheme administered from China. CoinDesk, citing the Financial Times, reported that victims’ lawyers are pursuing an appeal.
The Crown Prosecution Service said a further hearing will determine whether any victims can establish an interest in the seized Bitcoin.
Article produced with the assistance of artificial intelligence and reviewed by the editorial team.
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