Commentary: A Promising Sign in Landmark Bitcoin Case Involving Chinese Victims

[para. 1] In October 2024, the High Court in London addressed the creation of a compensation scheme for victims of the Lantian Gerui investment fraud, highlighting the UK authorities' efforts to reconcile justice, fairness, and practicality in cross-border digital asset recovery. This marks a pivotal phase in the high-profile Qian Zhimin case, as authorities now contend with how to balance state interests, public justice, and the rights of over 100,000 Chinese victims regarding massive cryptocurrency assets seized by UK law enforcement.

[para. 2][para. 3][para. 4] The case follows Qian Zhimin’s guilty plea and the seizure of over 60,000 bitcoins by UK authorities — a sum significant enough to draw international attention. Coincidentally, the US Department of Justice seized over 120,000 bitcoins from a Cambodian telecom fraud case at the same time. These incidents underline a growing global trend: economic crimes increasingly involve illicit proceeds converted to cryptocurrency, moved across borders, and frozen within Anglo-American legal systems. Both the UK and the US face a common challenge — determining how to equitably distribute crypto-based criminal proceeds among states, justice systems, and victims.

[para. 5][para. 6][para. 7] The Qian Zhimin fraud, impacting more than 100,000 people, has escalated past a standard legal issue into a practical demonstration of legal and law enforcement cooperation, as well as transnational asset return procedures between China and the UK. Initially, both countries worked together to obtain a conviction, but now focus has shifted to deciding ownership and distribution of the seized assets. Chinese victims seek restitution, while the UK government sees a chance for fiscal benefit, with Chancellor Rachel Reeves showing interest. The Crown Prosecution Service (CPS) commenced civil recovery proceedings in September 2024 and delayed seeking forfeiture until victims could file claims under Section 281 of the Proceeds of Crime Act 2002. This marks the CPS’s first concrete step towards distributing the assets — but also signals the onset of greater challenges as legal and practical complexities mount.

[para. 8][para. 9][para. 10][para. 11][para. 12][para. 13] The legal process allows private claims, but practical access is limited: only a small subset of Chinese investors, through a handful of law firms, are currently pursuing claims, leaving tens of thousands effectively shut out due to cost and complexity. Section 281 of POCA requires claimants to prove a proprietary interest in the property, a high bar with only two notable precedents (NCA v Robb 2014, NCA & NatWest v Odewale 2020). Applying such rigorous scrutiny to thousands would be an immense evidentiary burden, making widespread restitution unlikely without systemic changes.

[para. 14][para. 15][para. 16][para. 17][para. 18][para. 19][para. 20] At the October 15 hearing, the UK’s Director of Public Prosecutions suggested a structured compensation scheme, overseen by a court-appointed trustee, as an alternative to fragmented private claims. This would facilitate liquidation and distribution, but real challenges remain, including: defining transparent and efficient claims processes; determining fair classification and valuation of victims’ losses (especially whether to use original investment amounts or appreciated bitcoin values); reconciling individual claims with the broader compensation pool; and maintaining transparency within legal privacy constraints. These present unprecedented procedural and fairness challenges.

[para. 21][para. 22][para. 23][para. 24][para. 25][para. 26][para. 27] Apart from private claims, China could seek asset return via official channels under the U.N. Convention Against Corruption and the UK-China Mutual Legal Assistance Treaty. If China’s legal orders meet relevant UK and international standards, the UK could recognize and implement them. However, in practice, the UK’s civil recovery process is proceeding swiftly, with the possibility for procedural adaptation if China’s claim is later recognized, provided there is no double recovery. These events underscore the complexity of applying traditional legal frameworks to digital assets.

[para. 28][para. 29][para. 30][para. 31][para. 32] Liquidating such substantial bitcoin holdings (60,000 BTC of roughly 13 million in global circulation) poses unique challenges due to digital asset volatility and liquidity. The court-appointed trustee must use regulated sales strategies, risk-hedging, and tax compliance, managing both price and liquidity risks amid significant market volatility. The success of a “market-neutral” liquidation will be a critical test for UK regulators and courts.

[para. 33][para. 34][para. 35] The Qian case, alongside the US’s recent crypto asset seizures, epitomizes the emerging challenges at the intersection of international asset recovery and digital finance. The case is a pioneering test not only for UK digital governance but also for Sino-British judicial trust and cooperation in facing borderless economic crimes. The English High Court’s handling of this compensation mechanism may set precedents for global cross-border digital asset recovery and determine how nations cooperate to combat digital asset crime on a global scale.