Analysis: The Cross-Border Legal Scramble to Represent China’s Crypto Fraud Victims

1. On February 16 and 17, 2025, coinciding with Chinese New Year’s Eve and New Year’s Day, the English High Court is scheduled to address crucial procedural issues in Qian Zhimin’s high-profile Bitcoin civil recovery case. This hearing comes as Chinese families celebrate the Year of the Horse, yet for legal teams, focus is on the fate of over 61,000 Bitcoin (£5 billion or $6.82 billion) seized from Qian Zhimin in the UK. The court will decide whether these assets—acquired through alleged unlawful conduct—should be recovered by the Crown Prosecution Service for the UK's public purse or partially or wholly allocated for compensation to over 128,000 Chinese victims, with at least 8,000 claimants currently represented in proceedings. [para. 1][para. 2][para. 3][para. 4]

2. The central procedural issue is how the large number of Chinese claimants—victims of the "Lantian Gerui" or Qian Zhimin Bitcoin fraud—should be represented in the civil recovery, and which firms should take the lead. With numerous law firms representing different victim groups and submitting proprietary claims under Section 281 of the Proceeds of Crime Act 2002 (POCA), concerns have arisen over a proliferation of representation. Mr. Justice Turner warned that overlapping legal strategies could delay justice and unnecessarily deplete the seized assets through legal fees, emphasizing the need to manage costs and streamline representation. At the January 21 hearing, the judge proposed appointing a lead firm to represent the collective interests of victims to avoid inefficiency and ensure proportionate costs. Firms now have three weeks to submit arguments regarding this proposed structure before a final decision at the February hearing. [para. 3][para. 5][para. 6][para. 7][para. 9]

3. Leading the list of firms is Fieldfisher, collaborating with Gen Law Firm in China, representing over 2,100 claimants. Other heavyweight participants include Eversheds Sutherland, DLA Piper, and Duan & Duan, as well as a new joint team of Candey and Yingke, with the latter claiming over 5,000 victims. Although the court has publicized the proceedings to Chinese victims, only about 8,000—roughly 5-6% of the total—are currently represented. The court recognizes that Section 281 may not suffice as the main restitution mechanism given such large numbers and the risk that a single representative order could limit further claims after a cutoff. The financial stakes are high, not only for victims but also for law firms and litigation funders who have invested on a contingency or no-win-no-fee basis and now face uncertainty about reimbursement and involvement if a single lead firm is appointed. [para. 10][para. 11][para. 12][para. 13][para. 14]

4. Legal costs are a serious concern. High Court litigation in England is expensive, with senior counsel and forensic experts charging £500–£1,000 per hour, and funders typically taking 20–40% of gross recovery, with law firms taking another 20%. The court aims to avoid a repeat of the Post Office Horizon scandal, where £57.75 million in settlement resulted in only £11 million for the actual victims, as most of the money went to lawyers and litigation funders. The judge’s focus on unified representation is driven by a need to prevent excessive legal costs from eroding the value of the Bitcoin haul recoverable for victims. [para. 15][para. 16][para. 17][para. 18][para. 19][para. 20]

5. Competing legal strategies are apparent, as different law firms seek to lead the litigation and control case direction. Tactics differ, with some arguing for earlier and broader sharing of investigative evidence and differentiated treatment of victim groups according to investment size or claim strength. The approaches could affect outcomes depending on whether the case proceeds toward settlements or continues via Section 281 claims for proprietary recovery. [para. 21][para. 22][para. 23]

6. An additional substantive challenge is deciding whether English or Chinese law will apply—a matter scheduled for a hearing in July. If English law applies, victims might establish proprietary rights over the Bitcoin. Under Chinese law, however, they may be considered only creditors, entitled to repayment of lost sums but not to appreciate profits due to Bitcoin’s price rise. The outcome could determine the scope of recoverable damages for thousands of claimants. [para. 24][para. 25][para. 26][para. 27]

7. The case is also complicated by parallel insolvency proceedings initiated by a Chinese creditor to wind up Lantian Gerui in the UK. The insolvency process introduces additional parties—insolvency practitioners—and raises questions on how to separate criminally derived assets from company assets, organize creditor claims, and potentially pause civil recovery proceedings pending a judicial decision on jurisdiction over the seized assets. The upcoming hearing will address this intersection between insolvency and recovery. [para. 28][para. 29][para. 30][para. 31][para. 32]

8. The judge, noting the impracticality of numerous individual trials for thousands of Chinese victims, has signaled a strong preference for streamlined representation and practical mechanisms such as a compensation fund. There is judicial urgency to overcome delays and inefficiencies so Chinese victims receive fair, timely compensation, and the case serves justice effectively. [para. 33][para. 34]