The UK government has not yet won anything; the ruling only improved its legal position and does not mean that Bitcoin will immediately enter the UK treasury.

Written by: Blockchain Knight

At the beginning of this week, the High Court in London made a ruling that directly changed the path for 128,000 domestic victims to reclaim 61,000 Bitcoins (worth about $5 billion), stating that the ownership claim of these Bitcoins must be judged according to domestic law rather than UK law.

For many victims, this is not a final judgment, but it could be a critical step lost in the overall battle for recovery.

The case dates back to 2014, when Qian Zhimin used Tianjin Lantian Gelui Electronic Technology as a shell to lay an investment network nationwide, with up to 128,000 victims.

According to a special audit, Lantian Gelui raised over 40.2 billion yuan, of which about 34.1 billion yuan was returned to some investors, but not everyone received money.

Qian Zhimin converted part of the funds into Bitcoin. From 2014 to 2017, she purchased over 100,000 Bitcoins through exchange accounts at an average price of about 2,815 yuan each. Including subsequent over-the-counter transactions and mining income, the prosecution claims she accumulated about 195,000 Bitcoins, close to 1% of the total Bitcoin supply.

When the case was exposed in 2017, Qian Zhimin fled with a forged passport, carrying a laptop containing a cryptocurrency wallet. After arriving in the UK, she recruited a Chinese woman, Wen Jian, to assist with large expenditures across Europe.

A turning point occurred in 2018 when the two attempted to purchase a London mansion valued at 23.5 million pounds using Bitcoin, which drew police attention due to the ambiguous source of funds. The London police repeatedly searched and ultimately froze 61,000 Bitcoins.

The case then entered the civil recovery phase, where the UK prosecution progressed with asset disposal according to the law, while the victims attempted to apply to the court to declare that the seized Bitcoins belonged to them according to Article 281.

However, the High Court in the UK explicitly stated that applicants must prove they hold property rights to the Bitcoins; simply claiming "they owe me money" as a creditor of the fraudster is insufficient.

Victims originally hoped to apply UK law, but the judge determined that the harm occurred domestically, with applicants delivering funds domestically, and the promotional sales and Bitcoin purchases also occurring domestically.

The ruling implies that whether victims can claim rights to the Bitcoins themselves depends on whether domestic law recognizes such rights. Although there is some consensus on the property attributes of virtual currency in judicial practice, there is a lack of clear statutory provisions.

Complicating matters further, the original contract was priced in yuan, not Bitcoin, making it incredibly difficult to establish a legal tracing chain between each investment amount and the seized Bitcoins.

Many investors stated they only want to recover the principal and interest, as Bitcoin surged from about $3,000 at the time of the incident to over $80,000 now, an increase of more than 40 times, but there is still no legal answer as to who will ultimately own this appreciation.

Currently, about 16,000 victims have submitted claims through UK procedures, and the deadline for supplementary application for recovery in the UK is October 14. Relevant law firms have already planned to appeal, with a new hearing expected in 2027.

The UK government has not yet won anything; the ruling only improved its legal position and does not mean that Bitcoin will immediately enter the UK treasury.

However, if victims cannot prove ownership, the court may order the permanent confiscation and sale of the Bitcoins, with the proceeds going to the UK Treasury.