A High Court ruling in London has moved the UK government closer to retaining control of 61,000 Bitcoin seized from convicted fraudster Zhimin Qian, a holding now valued at about $5 billion.
The decision does not determine who will ultimately receive the cryptocurrency. Instead, it addresses which legal system should apply to claims from thousands of alleged victims seeking a share of the seized Bitcoin.
Court rejects English law approach
Judge Turner ruled that Chinese law, rather than English law, should govern the victims’ claims. The court found that the fraud, the victims’ payments, and the underlying contracts were all rooted in China, and that the relevant damage also occurred there.
That finding is important because English law had been viewed as more favorable to the claimants. Under that route, victims may have had a stronger basis to argue that the Bitcoin belonged to them and should be returned on that basis.
Why the legal question matters
Thousands of victims have filed applications under the Proceeds of Crime Act seeking declarations that parts of the seized Bitcoin are theirs. To succeed, each applicant must show a proprietary interest in the coins.
The law does not create a broad compensation system for all victims of crime in this context. As a result, the central issue is not simply whether losses occurred, but whether individual claimants can establish ownership rights over specific assets within the 61,000 BTC haul.
Ruling narrows one path, but does not end the case
The High Court’s decision is a setback for those applicants because it removes the legal framework they were widely seen as preferring. Even so, the ruling stops short of deciding whether the UK state, the victims, or another process will ultimately control the proceeds.
Judge Turner made clear that further questions remain, including the content of the relevant Chinese law and how that law will be proved before the court. Those issues are expected to be examined at a later stage.
What comes next
For now, the seizure remains intact while the legal fight shifts from the choice of law question to the substance of claims under Chinese law. The outcome could still affect whether any victims can establish the proprietary interests required under the UK confiscation framework.
Prosecutors have previously said that victims could be compensated through a redress scheme run from China. That possibility remains part of the wider picture, but the London ruling itself only resolves which law governs the current claims, not how any final distribution will be handled.
Source: decrypt.co