These 61,000 bitcoins may end up belonging to the UK government.
On Monday this week (October 12), Judge Turner of the High Court in London ruled that Chinese law, not English law, applies to the rights claimed by tens of thousands of Chinese investors over the 61,000 bitcoins controlled by UK authorities: $BTC . This may sound like a procedural issue, but in practice it sharply narrows the applicants’ path forward.
The story goes back to 2014–2017. Through Tianjin Lantian Gerui, Qian Zhimin persuaded 128,000 investors to put in around 40.2 billion yuan, then converted the funds into bitcoin and fled to the UK in 2017. In 2018, London police seized control of the coins during a search. At current prices, they are worth around £3.8 billion, or about $5 billion, making this the largest cryptocurrency seizure in UK history. Qian Zhimin pleaded guilty last November and was sentenced to 11 years and 8 months in prison.
The central issue in this latest ruling was which law applies. The applicants petitioned the court to confirm their ownership under Section 281 of the UK Proceeds of Crime Act, arguing that English law should apply. Under English law, tracing and trust rules might support a direct determination of ownership, allowing applicants to recover the bitcoins as owners rather than creditors. Prosecutors argued that Chinese law should apply “from every angle,” a position also supported by the receiver of Qian Zhimin’s former company. Judge Turner ultimately sided with the prosecution. Relying on the Rome I Regulation, he found that the contracts, payments, and bitcoin purchases all took place in China. The fact that the bitcoins were held in the UK did not mean English law could be applied retrospectively. He also made clear that if the applicants had no property rights when they bought the bitcoins under Chinese law, a tracing claim under English law could not revive those rights.
The implications have three parts. First, this is a procedural ruling, not a final decision: it determines which law applies, not who owns the coins. Second, whether the applicants can prove ownership of these 61,000 bitcoins under Chinese law has not yet been tested in court, and they still face several hurdles. If they are ultimately recognised only as creditors rather than owners, most of the portion for which no one establishes ownership could go to the UK government under the official disposal process. Third, Fieldfisher, the applicants’ lead law firm, has said it will appeal, while prosecutors say the next hearing will continue examining whether any applicants can establish an interest in the assets.
The contrast between two stark figures: around 6.1 billion yuan (about £600 million) remains unpaid to investors, while the seized bitcoins are now worth about $5 billion. Nearly all the gains from an eight-year bull run are caught behind the “applicable law” threshold. What the applicants really want is not compensation, but ownership of those gains—and that is the real battleground in this case.
This is also a reminder to the entire industry: in cross-border crypto enforcement, the governing law may have little to do with where the assets are held. Transparency on-chain does not mean ownership is clear.
#UKHighCourtRulesChineseLawGovernsBitcoinClaims
#BTC #UK
The above does not constitute investment advice. DYOR. Trading involves risk.
On Monday this week (October 12), Judge Turner of the High Court in London ruled that Chinese law, not English law, applies to the rights claimed by tens of thousands of Chinese investors over the 61,000 bitcoins controlled by UK authorities: $BTC . This may sound like a procedural issue, but in practice it sharply narrows the applicants’ path forward.
The story goes back to 2014–2017. Through Tianjin Lantian Gerui, Qian Zhimin persuaded 128,000 investors to put in around 40.2 billion yuan, then converted the funds into bitcoin and fled to the UK in 2017. In 2018, London police seized control of the coins during a search. At current prices, they are worth around £3.8 billion, or about $5 billion, making this the largest cryptocurrency seizure in UK history. Qian Zhimin pleaded guilty last November and was sentenced to 11 years and 8 months in prison.
The central issue in this latest ruling was which law applies. The applicants petitioned the court to confirm their ownership under Section 281 of the UK Proceeds of Crime Act, arguing that English law should apply. Under English law, tracing and trust rules might support a direct determination of ownership, allowing applicants to recover the bitcoins as owners rather than creditors. Prosecutors argued that Chinese law should apply “from every angle,” a position also supported by the receiver of Qian Zhimin’s former company. Judge Turner ultimately sided with the prosecution. Relying on the Rome I Regulation, he found that the contracts, payments, and bitcoin purchases all took place in China. The fact that the bitcoins were held in the UK did not mean English law could be applied retrospectively. He also made clear that if the applicants had no property rights when they bought the bitcoins under Chinese law, a tracing claim under English law could not revive those rights.
The implications have three parts. First, this is a procedural ruling, not a final decision: it determines which law applies, not who owns the coins. Second, whether the applicants can prove ownership of these 61,000 bitcoins under Chinese law has not yet been tested in court, and they still face several hurdles. If they are ultimately recognised only as creditors rather than owners, most of the portion for which no one establishes ownership could go to the UK government under the official disposal process. Third, Fieldfisher, the applicants’ lead law firm, has said it will appeal, while prosecutors say the next hearing will continue examining whether any applicants can establish an interest in the assets.
The contrast between two stark figures: around 6.1 billion yuan (about £600 million) remains unpaid to investors, while the seized bitcoins are now worth about $5 billion. Nearly all the gains from an eight-year bull run are caught behind the “applicable law” threshold. What the applicants really want is not compensation, but ownership of those gains—and that is the real battleground in this case.
This is also a reminder to the entire industry: in cross-border crypto enforcement, the governing law may have little to do with where the assets are held. Transparency on-chain does not mean ownership is clear.
#UKHighCourtRulesChineseLawGovernsBitcoinClaims
#BTC #UK
The above does not constitute investment advice. DYOR. Trading involves risk.