Victims of a Chinese investment fraud are asking the High Court of England and Wales to reject a proposed compensation plan for about 61,000 seized Bitcoin, arguing the arrangement could allow British authorities to keep much of the assets’ price gains.
The dispute stems from a fraud scheme linked to Zhimin Qian that ran between 2014 and 2017 and allegedly defrauded more than 128,000 investors in China before proceeds were converted into Bitcoin and moved abroad.
According to the Financial Times, the seized Bitcoin is now worth about £3.2 billion ($4.3 billion) after rising sharply in value since British police confiscated the assets during a money-laundering investigation.
Law firm Candey, representing roughly 5,700 victims, said the proposed redress scheme may not guarantee fair restitution if compensation is based only on original losses rather than the current value of the cryptocurrency.
Prosecutors argued in court filings that some claims could allow a limited group of victims and litigation funders to recover more than their initial losses, potentially excluding other victims and the Crown.
The case also highlights a broader legal challenge around crypto seizures, where digital assets can significantly increase in value between confiscation and restitution.
British authorities seized the Bitcoin during a 2018 raid on a London property connected to Jian Wen, who was later convicted of money laundering related to the scheme.
A preliminary hearing is scheduled for July to determine whether English or Chinese law will govern claims to the seized Bitcoin, while claimants seeking recovery must file under Section 281 before a May 22 deadline.
At the time of reporting, Bitcoin price was $71,523.24.