Chinese Bitcoin Fraud Victims Lose Key Court Battle Over…
Chinese investors seeking to recover funds lost to a massive investment fraud have suffered a legal setback after the UK High Court ruled that Chinese law must govern their claims to more than 61,000 Bitcoin seized by British authorities. In a judgment dated October 12, 2026, Mr Justice Turner rejected arguments that English law should determine whether victims hold ownership rights over the cryptocurrency.
The decision resolves which country’s law applies to the claims, but leaves the question of whether investors can recover the assets unresolved. The case follows an earlier challenge by investors to the proposed compensation arrangements for the seized Bitcoin, which British authorities recovered during a money-laundering investigation.
Court Rules Chinese Law Applies to Bitcoin Claims
The case concerns Bitcoin seized by the Metropolitan Police during searches of a London property and safe deposit box on October 31 and November 1, 2018. The cryptocurrency formed part of the proceeds of investment schemes operated by Zhimin Qian through Tianjin Lantian Gerui Electronic Technology Co Ltd and other entities.
According to the agreed facts in the judgment, the schemes generated approximately RMB 40.23 billion, equivalent to about £4.1 billion, between 2014 and 2017. An audit identified at least 128,409 investment contracts, although the court noted that the figure did not establish the number of individual victims.
Qian converted some of the proceeds into Bitcoin before leaving China in July 2017. She arrived in London in September that year, where authorities later investigated the movement of the funds and seized cryptocurrency-related devices and access keys.
In November 2025, Qian received a prison sentence of 11 years and eight months after admitting offences connected to the fraud and money laundering. The case also prompted disputes over how authorities should compensate investors, as detailed in a report on victims challenging the UK’s proposed compensation plan.
The victims brought claims under Section 281 of the Proceeds of Crime Act 2002, seeking declarations that they held ownership interests in the recovered Bitcoin. Proving that an investment scheme owes someone money does not automatically establish ownership of specific assets seized by authorities.
Victims Must Establish Ownership Under Chinese Law
The claimants argued that English law should govern their claims, including arguments involving the cancellation of investment contracts, constructive trusts and the tracing of funds into Bitcoin.
Justice Turner concluded that Chinese law applied because the investment schemes, alleged misrepresentations, payments and acquisition of the Bitcoin were centred in China. He also rejected the argument that English law should apply simply because the parties had not yet presented evidence establishing the content of Chinese law.
The court has not determined whether individual investors possess enforceable ownership rights under Chinese law or how the seized cryptocurrency should ultimately be distributed. Those questions remain for further proceedings.
The case comes amid wider scrutiny of cryptocurrency theft and laundering. In October, blockchain investigator ZachXBT alleged that a Chinese crime network handled more than $1 billion in cryptocurrency linked to North Korean hacking operations, including funds associated with the 2025 Bybit hack. His findings, reported in an investigation into the alleged laundering network, remain allegations based on his investigation rather than a judicial finding.