Bitcoin fraud victims may lose gains under UK court ruling

A UK High Court ruling has placed claims over more than 61,000 Bitcoin under Chinese law, putting potential gains for about 16,000 fraud victims at risk, according to Caixin.

Caixin reported that an Oct. 12 judgment from the High Court of England and Wales could limit participating Chinese investors to recovering their principal and interest, rather than sharing in Bitcoin’s appreciation.

According to the report, the disputed cryptocurrency is connected to the illegal fundraising operation run through Tianjin Lantian Gerui Electronic Technology, also described as Tianjin Blue Sky Ge Rui.

The High Court’s decision concerns which country’s law governs the investors’ asserted ownership rights. In the judgment, Mr Justice Turner left questions about the content, effect and proof of Chinese law for a later stage, rather than determining each applicant’s entitlement.

Chinese law will govern Bitcoin ownership claims

In its account of the decision, Duan & Duan UK LLP said the Director of Public Prosecutions brought civil recovery proceedings under Part 5 of the Proceeds of Crime Act 2002.

The firm explained that investors have applied under Section 281, which allows people to seek a declaration that property subject to recovery belongs to them. Applicants must establish an ownership interest; a personal claim against the fraudster for repayment is insufficient, according to the firm.

For the investors, the argument included cancelling investment contracts induced by fraud and tracing their money into the Bitcoin, Duan & Duan said. The prosecution supported applying Chinese law, while applicants sought English law or a combination of both systems.

According to the judgment, the court rejected the investors’ attempt to establish English law as the governing law through several alternative legal arguments. English law will still supply the procedural framework through which the claims are heard.

Duan & Duan partner Jackson Ng said the firm was reviewing the decision with its clients.

“We are considering the judgment carefully with our clients and will continue to pursue their claims.”

In the firm’s explanation, the court treated the investments and conversion of money into Bitcoin as transactions centred in China. The later presence of the cryptocurrency in England did not establish that English law governed the investors’ original rights.

Qian’s sentence followed a fraud affecting 128,000 people

As crypto.news previously reported, Qian Zhimin received a prison sentence of 11 years and eight months at Southwark Crown Court on Nov. 11, 2025.

According to that report, the fraud affected more than 128,000 people in China between 2014 and 2017. Qian, also known as Yadi Zhang, pleaded guilty to two money laundering charges in September 2025 before Judge Sally-Ann Hales imposed the sentence.

The November report valued the seized Bitcoin at more than $6 billion at the time. That historical valuation is separate from the amount victims originally invested and the sum they may ultimately recover.

In its September 2025 report on Qian’s operation, the publication described investment products promising returns of up to 300%. The report said many investors were aged between 50 and 75 and had committed amounts ranging from hundreds of thousands to tens of millions of yuan.

Citing the Crown Prosecution Service, that coverage said Jian Wen helped Qian launder the proceeds. Wen was sentenced to six years and eight months in prison in 2024 for her role.

According to the October judgment’s agreed factual background, Metropolitan Police searched a London property and safe deposit box on Oct. 31 and Nov. 1, 2018. Officers seized devices and keys used to access Bitcoin, with additional assets recovered when Qian was arrested in April 2024.

UK recovery powers require separate court decisions

In recent coverage of UK seizures, the publication reported that Avon and Somerset Police recovered 20.21 Bitcoin, other digital assets and bank funds valued at £1,032,487.86.

According to the police announcement dated Aug. 27, investigators traced the assets to darknet marketplaces operating between 2016 and 2019. A court ordered forfeiture under the Proceeds of Crime Act earlier in 2026.

That report explained that crypto wallet freezing orders became available in April 2024 following changes to the act. Citing UK government guidance, it said police can freeze cryptocurrency suspected of links to unlawful activity even without an arrest.

The coverage also noted that a freezing order alone does not establish that assets are criminal property. In the Avon and Somerset case, forfeiture followed a court finding that the holdings came from unlawful conduct.

US victims can seek compensation from forfeited assets

For American readers, the US Department of Justice explains that its remission process can compensate eligible crime victims using forfeited assets. The department describes remission as discretionary and distinct from court-ordered restitution.

Under the department’s guidance, applicants must demonstrate a specific financial loss directly caused by the crime, among other eligibility requirements. Authorities must identify, seize, and forfeit assets before remission can occur.

According to the DOJ, compensation comes from net forfeiture proceeds after associated costs. When those proceeds fall short of eligible victims’ combined losses, the money is distributed proportionally.

In a March 13 announcement, the US Attorney’s Office for the District of Maine said the department would return about $470,735 to two cryptocurrency investment fraud victims.

According to court records cited in the announcement, criminals received more than $800,000 belonging to the victims in 2022. The FBI traced and seized 470,773 USDT, and a federal court ordered forfeiture after prosecutors filed a civil complaint alleging links to wire fraud and money laundering.