The UK High Court has ruled that Chinese law will govern ownership claims over more than 61,000 Bitcoins seized by British authorities, a haul currently valued at over $1.7 billion. The October 12 decision by Mr. Justice Turner leaves the ultimate distribution of the assets unresolved while setting the legal framework for the ongoing civil recovery proceedings.

The cryptocurrency is tied to a large-scale investment fraud operated by Chinese national Qian Zhimin, also known as Yadi Zhang, through the company Tianjin Lantian Gerui Electronic Technology between 2014 and 2017. Qian was later sentenced in the UK to 11 years and eight months in prison for money laundering offenses related to the scheme.

Origins of the Fraud Scheme

Court records show that the operation involved 128,409 investment contracts promising high returns on digital assets, senior care services and other ventures. Investors paid approximately 40.23 billion yuan, equivalent to about $5.9 billion at current exchange rates. Of that sum, roughly 34.1 billion yuan was returned to some participants in a structure prosecutors described as a classic Ponzi scheme.

A portion of the remaining funds was converted into Bitcoin. Between June 2014 and June 2017, more than 100,000 Bitcoins were purchased through an account on the Huobi exchange. British police later recovered more than 61,000 of those coins.

Raids on properties linked to Qian and associate Jian Wen in October and November 2018 yielded electronic devices and private keys that gave authorities control of the Bitcoin. Additional assets were recovered following Qian’s arrest in April 2024. Jian Wen received a prison sentence of six years and eight months in 2024 for her role in laundering the proceeds.

The Legal Dispute and Governing Law

Approximately 16,000 Chinese investors have joined civil recovery proceedings in the UK, seeking to establish proprietary rights over the seized Bitcoin. They argued that English property law should apply, allowing them to trace their funds into the cryptocurrency and potentially claim both the original investment and subsequent price appreciation.

The Director of Public Prosecutions is pursuing recovery under the Proceeds of Crime Act 2002. Prosecutors maintained that the investments, contracts, payments and Bitcoin purchases were centered in China, so Chinese law should determine the existence and content of any ownership rights.

Mr. Justice Turner accepted that position. The court found that the later presence of the Bitcoin in England did not shift the governing law to English rules for the underlying proprietary claims. English law continues to provide the procedural framework for the case, but the substance of the investors’ asserted ownership interests will be assessed under Chinese law.

Implications for Recovery

The ruling does not decide whether any individual investors hold ownership rights, order the transfer of assets or determine how any recovery will be shared. Those questions, along with the detailed content and application of Chinese law, remain for later stages of the proceedings.

Under the framework now in place, successful claimants are more likely to be limited to repayment of their original contributions plus interest. A different outcome under English property law could have opened a path to claiming the Bitcoin itself and sharing in its substantial rise in value since the mid-2010s purchases.

The case ranks among the largest cryptocurrency seizures handled by UK authorities. Further hearings will address the practical application of Chinese law to the individual claims before any final distribution of the assets can occur.