UK court sends $5bn seized bitcoin claims to Chinese law
A High Court judge ruled Chinese law will govern victims’ claims to 61,000 seized bitcoin, narrowing their route to the £3.8bn haul without deciding who owns it.
Uruguay Can Editorial
The ownership fight over more than 61,000 seized bitcoin remained open on Monday, but a High Court ruling sent victims’ claims to Chinese law, strengthening the UK government’s position over a £3.8bn ($5bn) haul.
In its judgment in the Director of Public Prosecutions v Qian case, the court said Chinese law governs the rights investors say they have in the coins. The case concerns bitcoin seized by London’s Metropolitan Police from assets linked to Zhimin Qian, who ran investment schemes in China from 2014 to 2017. Victims say they lost money in the schemes, part of which was converted into bitcoin.
Why did the court choose Chinese law?
Judge Mark Turner found the claims were rooted in events in China: investors paid money there, the alleged fraud and investment arrangements were based there, and the bitcoin was bought there. The investors had argued that English law, or a mix of English and Chinese law, should govern their claims. Turner rejected those routes, including an argument that UK law’s tracing rules could establish ownership.
The claims are being made under section 281 of the Proceeds of Crime Act, which lets people ask a court to declare that recovered property belongs to them. The judge said that route requires applicants to show a proprietary interest in the bitcoin; a claim for repayment from the fraudsters alone does not establish that the coins belong to them.
Does the ruling give the bitcoin to the UK?
No. The decision settles which law governs the victims’ claims, not who owns the bitcoin or how the recovery case ends. The judge said the existence and content of any rights under Chinese law must be assessed later. The Block reported that claimants’ lawyers are pursuing an appeal.
What comes next for the victims?
The next stages turn on whether applicants can establish rights under Chinese law that meet the UK statutory test. In practical terms, the process is:
- Establish the content and effect of Chinese law on the investors’ rights.
- Determine whether those rights give any applicant a proprietary interest in the seized bitcoin under section 281.
Until then, the government’s prospects of retaining much of the haul have improved, but the court has not made a final ownership decision.
Sources
- its judgment in the Director of Public Prosecutions v Qian case — caselaw.nationalarchives.gov.uk
- reported that claimants’ lawyers are pursuing an appeal — theblock.co