China Seeks to Confiscate 61,800 Bitcoin in $5.7B Fraud Case
Chinese prosecutors are seeking to confiscate more than 61,800 Bitcoin linked to an alleged investment fraud that raised over 40 billion yuan ($5.7 billion), as authorities move forward with proceedings to recover assets for victims.
The case involves Qian Zhimin, who allegedly controlled Tianjin Lantian Gree Electronic Technology. Between 2014 and 2017, the company sold unauthorized wealth-management products across China, promising investors guaranteed returns and protection of their initial investments.
The scheme reportedly collected more than 40.378 billion yuan from over 102,000 investors. Nearly 20 billion yuan in losses were recorded. Prosecutors allege that the funds were used to pay earlier investors, support fictitious investment projects, purchase Bitcoin and acquire property, cars and jewelry rather than finance legitimate business activities.
Qian left China in 2017 and later moved to the United Kingdom. British authorities subsequently seized assets linked to the case, including more than 61,800 BTC, as well as Bitcoin Cash, Bitcoin Gold, Bitcoin SV, XRP, Dogecoin, cash, jewelry and investment holdings.
Chinese Court Opens Asset Confiscation Proceedings
On October 13, the Tianjin Second Intermediate People's Court confirmed that it had accepted prosecutors' application to confiscate the assets as proceeds of illegal activities.
The court has established a six-month period during which victims and other interested parties can participate in the proceedings. Those who do not join the case may still seek compensation from any assets eventually recovered.
The process could determine how the seized cryptocurrency and other property are handled, although the final distribution to victims remains unresolved.
UK Ruling Adds to Bitcoin Ownership Dispute
The Chinese proceedings follow a UK High Court ruling that Chinese law, rather than English law, should determine alleged victims' claims to the more than 61,000 BTC seized in Britain.
The decision does not automatically prevent victims from recovering their funds. Instead, it means their claims must be assessed under Chinese law to establish whether they have legally recognized property rights in the Bitcoin. Further hearings are expected, while lawyers representing some victims are seeking permission to appeal.
The dispute highlights the legal challenges involved in returning cryptocurrency linked to large-scale fraud, particularly when the alleged offenses, victims and seized assets span multiple jurisdictions.
Bitcoin Holdings Could Be Worth Billions More
The case is among China's largest alleged fraud investigations involving cryptocurrency. The value of the seized Bitcoin has also become a major factor in the dispute, as its market price has changed substantially since the assets were acquired.
With more than 61,800 BTC at stake, the proceedings could have significant financial consequences for the affected investors. However, the amount ultimately available for compensation will depend on the court's decisions, the recognition of victims' claims and the treatment of the seized assets.