The UK Offers Bitcoin Fraud Victims Compensation – But Keeps Most of $7.2B Haul
The UK authorities has proposed a compensation scheme for victims of a Chinese funding fraud whereas looking for to retain the bulk of a £5 billion ($7.2 billion) Bitcoin fortune seized from the perpetrators.
The announcement got here throughout a High Court listening to in London on Wednesday, the place the Director of Public Prosecutions knowledgeable victims’ legal professionals concerning the risk of establishing such a scheme, although particular particulars stay undisclosed.
At the middle of the dispute are 61,000 Bitcoin, price $6.7 billion, seized by police in 2018 from units discovered at a mansion in Hampstead, north London, now representing one of the biggest cryptocurrency seizures in UK historical past.
The case has pitted British authorities in opposition to roughly 130,000 Chinese buyers who misplaced cash within the fraud and contend the UK state mustn’t profit from their losses.
The Fraud and Seizure
Zhimin Qian, 47, also referred to as Yadi Zhang, masterminded an funding fraud in China between 2014 and 2017 that defrauded victims of 43 billion yuan ($6 billion).
She fled China after changing a lot of the buyers’ money into Bitcoin and settled within the UK below a false id.
Qian and her Malaysian affiliate Seng Hok Ling, 47, pleaded guilty to money laundering charges final month at Southwark Crown Court in London. Both are scheduled for sentencing in November.
Bitcoin’s worth has surged dramatically because the 2018 seizure, climbing from roughly $1.8 billion on the time to its present valuation of roughly $7.2 billion.
UK authorities just lately obtained entry to extra cryptocurrency property price about £67 million after Qian disclosed entry codes and passwords for a ledger and two cryptocurrency wallets.
“The ledger had been present in a purpose-made hid pocket inside a pair of jogging bottoms which [Zhang] was sporting on the time of her arrest,” in keeping with written submissions by Martin Evans KC, counsel for the Crown Prosecution Service.
Compensation Proposal and Victim Response
Evans instructed the court docket that the proposed compensation scheme would supply “enough safety” for victims.
The CPS said it had maintained all through authorized proceedings that it meant to hunt a civil restoration order to compensate victims for his or her misplaced funding, insofar as they haven’t in any other case been compensated.
The company stated it will think about how all victims might be compensated, not simply these taking part within the UK authorized proceedings.
William Glover, director at regulation agency Fieldfisher representing a gaggle of victims, stated in an announcement following the listening to that “the DPP has successfully accepted accountability to create a kind of compensation scheme for many who could also be unable to hunt redress via the prevailing statutory provisions.”
However, legal professionals for the victims face severe challenges in proving direct hyperlinks between their shoppers’ investments and the confiscated cash.
Jack Ding, assistant managing companion at Duan & Duan, which represents round 10,000 victims, famous that “some supplies lack adequate data to determine a transparent connection.”
Legal consultants warn that victims are unlikely to get well Bitcoin’s appreciated worth, as courts usually give attention to returning principal quantities and cheap curiosity slightly than speculative good points.
Treasury Implications and Market Concerns
The Bitcoin spoils have drawn consideration from UK Treasury officers, with some privately questioning whether or not the property may assist Chancellor Rachel Reeves deal with the nation’s fiscal hole estimated at as much as £30 billion by 2029.
However, different authorities officers have cautioned that the haul is probably going topic to protracted authorized battles extending doubtlessly into 2027.
The Treasury has been suggested it can not embrace the seized property in its fiscal calculations, because the Office for Budget Responsibility doesn’t account for asset seizures in its forecasts.
Meanwhile, authorities face the sensible problem of liquidating such a big Bitcoin place with out triggering major market disruption.
The UK authorities is trying to retain over 61,000 Bitcoin that was seized from a Chinese nationwide convicted in a large funding fraud case. #UK #Cryptohttps://t.co/L7LPgA3fCW
— Cryptonews.com (@cryptonews) October 1, 2025
The case has sparked debate about cryptocurrency regulation and enforcement in cross-border fraud circumstances, with implications for the way governments deal with seized digital property.
A civil restoration case filed in September 2024 will decide the ultimate distribution of property, with proceedings scheduled to proceed via January 2026.
The consequence is predicted to determine precedents for worldwide cooperation in cryptocurrency-related financial crime circumstances and should affect how different jurisdictions strategy related seizures.
The coordination difficulties are compounded by the truth that many victims have restricted expertise with digital finance, making documentation and declare verification significantly difficult.
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