About 61,000 bitcoin, worth roughly $5 billion, sits in British custody, and a High Court ruling on Monday made it harder for fraud victims to claim it. Mr Justice Mark Turner held that Chinese law governs whether the victims retain any rights in the coins.
The bitcoin was seized by the Metropolitan Police in 2018 and traces back to Zhimin Qian, who ran Ponzi schemes in China between 2014 and 2017. She pleaded guilty to money laundering and was sentenced last November to 11 years and eight months.
About 16,000 Chinese investors lost money in those schemes. Their lawyers wanted English law, or a blend, to apply. The Director of Public Prosecutions argued for Chinese law, and the judge agreed, finding that the relevant damage occurred in China.
The practical effect is a high bar. Victims must show a proprietary interest in the specific coins, and a personal claim for repayment against the fraudsters is not enough. Because the bitcoin was bought in China, the judge said tracing it into England cannot revive property rights that were lost under Chinese law.
The Financial Times said the ruling improves the government’s chances of keeping much of the haul. Fieldfisher, acting for individual claimants, is pursuing an appeal.
The judgment settles which country’s rules apply, not who wins. What Chinese law actually says, and whether any victim can show an interest in these coins, will be argued at a later hearing.
That leaves the largest unknown untouched. If victims are limited to their original losses plus interest, as Caixin has suggested, the question of who keeps the gains on a decade of bitcoin appreciation is still wide open.
