What happened in the Chinese 107 Bitcoin theft case?

A court in Qingdao, China, sentenced a man identified as Zhang to 10 years and nine months in prison for stealing 107 Bitcoin. Prosecutors said Zhang memorised 11 words from a victim's 12-word wallet recovery phrase and later reconstructed the final word to gain access to the funds.

How did Zhang steal 107 Bitcoin using a seed phrase?

According to prosecutors, Zhang observed and memorised 11 of the 12 recovery words while helping the victim set up a wallet. He later worked out the final word, accessed the wallet and transferred 107 Bitcoin without permission.

Why is the Chinese court's treatment of Bitcoin important?

The court ruled that Bitcoin qualifies as property under Chinese criminal law and can therefore be stolen like other forms of property. This is notable because China continues to restrict cryptocurrency trading and mining despite recognising ownership rights in certain legal disputes.

Does China legally recognise Bitcoin as property?

In this case, prosecutors successfully argued that Bitcoin met the legal definition of property for the purpose of a theft prosecution. While China maintains strict restrictions on crypto activities, courts have increasingly recognised that digital assets can have property rights attached to them.

How much Bitcoin was stolen in the case?

Zhang allegedly transferred 107 Bitcoin from a wallet containing 117 Bitcoin. The article does not specify the current market value of the stolen assets, but 107 Bitcoin represents a substantial holding worth millions of dollars at recent prices.

What does this case reveal about crypto wallet security?

The case highlights that human error can be a greater security risk than technical vulnerabilities. Even though wallet recovery phrases are highly secure cryptographically, exposing them to another person can compromise the entire wallet.

Why are recovery phrases so important for Bitcoin holders?

A recovery phrase acts as the master key to a crypto wallet. Anyone who gains access to the phrase can potentially restore the wallet on another device and control the assets stored inside it.

Image for illustrative purposes only. Not a real photo.

Chinese court jails man over 107 Bitcoin theft

Written by Liezl GambePublished Jun 8, 2026, 11:58 PM

A court in Qingdao, eastern China, has sentenced a man to 10 years and nine months in prison for stealing 107 Bitcoin after memorising 11 words from a victim's 12-word wallet recovery phrase.

The Licang District People's Court also fined the defendant, identified as Zhang, 100,000 yuan ($14,700) after determining he gained control of the victim's wallet and later converted part of the stolen assets into more than $97,000 in proceeds.

The case stemmed from a July 2023 transaction in which Feng asked Zhang, an acquaintance who had previously assisted with Bitcoin transactions, to help cash out 117 Bitcoin.

According to prosecutors, Zhang memorised 11 of the 12 recovery words while Feng was setting up the wallet and later reconstructed the final word to access and transfer 107 Bitcoin without permission.

The court ruled that Bitcoin could be treated as property under Chinese criminal law and therefore be subject to theft offences, despite China's long-standing restrictions on cryptocurrency trading and mining activities.

Investigators traced the missing Bitcoin to Zhang through transaction records after Feng reported the theft, while Zhang admitted moving the assets but claimed he was safeguarding them and later lost money through price speculation.

Alvin Kan, chief operating officer of Bitget Wallet, said the case demonstrates that cryptocurrency security failures often stem from human behaviour rather than technical weaknesses, warning that even brief exposure of wallet recovery phrases can create significant risks for digital asset holders.

At the time of reporting, Bitcoin price was $63,004.81.