Key facts
- Chinese fraud victims lost a UK court battle over 61,000 seized Bitcoin.
- The High Court ruled Chinese law applies to claims on the $5 billion haul.
- Victims must prove property rights under Chinese law to succeed.
- The seized Bitcoin is valued at approximately $5 billion.
- Lawyers for the victims plan to appeal the ruling.
Chinese fraud victims seeking to recover 61,000 Bitcoin seized by the British government have lost a significant legal battle after London's High Court ruled that Chinese law, rather than English law, should govern their claims to the assets. The decision, delivered on Monday by Justice Mark Turner, rejected arguments for applying English law or a combination of both. The judge stated that Chinese law must determine whether the claimants have property rights in the seized Bitcoin, with the validity of these claims to be assessed in subsequent proceedings.
The dispute originates from an investment fraud scheme orchestrated by Zhimin Qian between 2014 and 2017. British authorities seized the assets during a money-laundering investigation. In March, victims challenged a proposed compensation arrangement involving a Chinese redress scheme, arguing it could leave British authorities with substantial gains from Bitcoin's appreciation. The victims had hoped that applying English law would allow them to claim direct ownership of the Bitcoin, rather than merely seeking compensation as creditors.
Despite the ruling, the case will remain before the High Court in London. The next stage will involve expert evidence on Chinese law to determine if the victims can establish ownership interests. The Crown Prosecution Service indicated that a further hearing would examine how Chinese law applies and whether any victims can establish an interest in the seized assets. Earlier reports indicated that over 128,000 investors were affected by the fraud.