Britain's High Court has ruled that Chinese law, not English law, must determine who owns more than 61,000 Bitcoin seized from a fugitive Chinese fraudster — a haul now worth roughly $5 billion. In an Oct. 12 judgment, Justice Mark Turner dismissed an attempt by Chinese victims to use English legal principles to trace their stolen money into the cryptocurrency, finding that the entire scheme was overwhelmingly connected to China.
"The two should not be conflated," Turner wrote, distinguishing the question of which country's law governs from the separate issue of proving what that law actually says.
The scheme behind the seizure
The case traces back to investment schemes run by Zhimin Qian through Tianjin Lantian Gerui Electronic Technology and related businesses between 2014 and 2017. The operations pulled in about 40.23 billion yuan (£4.1 billion) through at least 128,409 investment contracts, according to the court. Turner cautioned that the number of contracts should not be mistaken for the number of individual victims.
More than 34.1 billion yuan (£3.4 billion) flowed back to investors while the scheme was running. Others got nothing.
Qian converted part of the proceeds into Bitcoin, including purchases of more than 100,000 BTC through an exchange account at Huobi, plus over-the-counter deals in China. He fled China in 2017 and ended up in Britain, where authorities later seized devices, private keys and other assets tied to over 61,000 BTC.
Why victims wanted English law
Chinese investors argued that English legal principles would let them trace their stolen investments into the Bitcoin Qian bought. They also contended that the fraudulent investment contracts could be rescinded, creating trust-based ownership interests that followed the money into the cryptocurrency.
British prosecutors pushed back, maintaining that the original transactions and the alleged acquisition of ownership rights happened in China. Turner sided with them. He found that the investors, the perpetrators, the payments and the crypto purchases were overwhelmingly connected to China, and rejected the idea that Bitcoin's eventual presence in Britain should decide which country's property laws applied.
The bar under Section 281
Under Section 281 of Britain's Proceeds of Crime Act 2002, claimants seeking recovery must show a proprietary interest in the targeted assets — they can't simply demonstrate that criminals owe them compensation. Turner stressed that the provision "does not create any broader compensation scheme" for people who lost money through criminal conduct.
The recovered crypto is already the subject of civil recovery proceedings brought by Britain's Director of Public Prosecutions under that same act.
What comes next
The next round will decide whether Chinese law actually recognizes the ownership interests the investors assert in the seized Bitcoin. That means the investors may have to establish how Chinese law treats fraudulent investment contracts, whether ownership rights survive the conversion of stolen funds into cryptocurrency, and whether those rights reach the specific assets held by British authorities.
None of that is settled yet. Turner decided Chinese law governs the underlying claims, but the court hasn't received evidence establishing its relevant provisions or the factual basis of each investor's asserted ownership.
The litigation also involves receivers appointed to Tianjin Lantian Gerui at the initiative of one alleged victim. Those receivers have asserted separate claims over assets held by British prosecutors. Turner called the validity of that route "a question for another day."
