A London court has strengthened the U.K. government’s chances of keeping most of 3.8 billion pounds ($5 billion) in seized bitcoin , after ruling that thousands of Chinese fraud victims cannot use English law to claim coins.
The decision concerns 61,000 BTC seized by London’s Metropolitan Police in its investigation into Zhimin Qian, who pleaded guilty to defrauding thousands of people in China.
Qian ran a massive Ponzi scheme through her company, Tianjin Lantian Gerui Electronic Technology, defrauding over 128,000 investors between 2014 and 2017. She converted the stolen billions into bitcoin and fled to the U.K. in 2017.
The victims had argued that English law should apply, as it could have allowed them to claim property rights over the multi-billion-pound crypto fortune. However, in a judgment on Monday, Mr Justice Mark Turner of the London High Court sided with U.K. authorities, ruling that because the underlying fraud occurred entirely in China, Chinese law, and not English law, must govern the victims' property claims.
“The relevant damage occurred in China. The applicants parted with their money in China. The alleged fraudulent representations were made in China,” the judge said. “The contractual relationships thereby induced were entered into in China. The immediate economic consequences of the alleged wrongdoing were likewise suffered in China.”
Note that the ruling does not finally decide who keeps the bitcoin. But it narrows the victims’ route to recovering it and improves the chances of the U.K. Treasury eventually retaining the seized bitcoin.
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