U.K. Court Accepts Chinese Investor’s Lawsuit Linked to Nearly $4 Billion in Laundered Bitcoin

A U.K. court has agreed to hear an investor lawsuit seeking the liquidation of a Chinese company implicated in a significant fraud, which left around $3.9 billion in Bitcoin inaccessible to the victims in China. The court's decision begins a complex cross-border legal process for recovering over 61,000 bitcoins seized by British police following an investigation into a scam that embezzled around 43.5 billion yuan ($6.2 billion) from over 100,000 people in China [para. 1][para. 2].

The bitcoins were moved overseas in part and later seized in the U.K., marking the most extensive Bitcoin money laundering case in British history. The Business and Property Courts of England and Wales ordered the notification of the company behind the scam, Tianjin Lantian Gerui Electronic Technology Co., regarding the pending case in the U.K. On July 25, a court order allowed the details to be published in China's national and local newspapers in Tianjin, where the company was headquartered, to ensure all parties involved are informed [para. 3][para. 4].

The main individual tied to Gerui Electronic and the scam's alleged mastermind, Qian Zhimin, was arrested in the U.K. in April. Qian's arrest and subsequent legal procedures highlight the complexities of the cross-border legal proceedings. Generally, creditors in China cannot directly initiate a U.K. court's compulsory liquidation of a Chinese company. Nevertheless, if the company's controller has assets in the U.K., Chinese creditors can attempt recovery through the U.K. legal process [para. 5][para. 6].

Qian arrived in London in 2017, following China's crackdown on cryptocurrency trading. Records from a Hebei province court suggested that she planned to transfer her assets to the U.K. as early as 2015. The company registered a London branch, aiming to lure investors by posing as a technology company offering risk-free, high-return wealth management products backed by cryptocurrencies, as stated by Ren Jiangtao, the company's sole shareholder [para. 7][para. 8].

In late 2017, Tianjin police commenced an investigation into Gerui Electronic on suspicion of illegal fundraising, while other local police across China attempted to recover lost funds for investors. In April, the Metropolitan Police received a request from Chinese authorities concerning the seized bitcoins, which might affect the distribution timeline of assets in liquidation [para. 9][para. 10][para. 11].

Li Yinyao, a lawyer from Shanghai Yingdong Law Firm representing an investor who filed the U.K. liquidation petition, highlighted the potential duration of such proceedings, possibly lasting years. Xu Jinghan, from Beijing Dacheng Law Offices, noted that civil recoveries could be feasible for Chinese investors but require thorough knowledge of foreign legal procedures. Qian faces trial on October 21 with charges that include illegal cryptocurrency activities. In May, her lawyer stated that Qian denies the fraud accusations, asserting that she fled China due to a government crackdown on successful crypto entrepreneurs, seeking refuge in the U.K. from potential persecution [para. 12][para. 13][para. 14].