UK High Court ruled that £4B Bitcoin fraud claims must be governed by Chinese law, complicating victim recovery efforts.
Regulation & Gov ·
A UK High Court judge has determined that claims over more than 61,000 BTC seized from a multibillion-pound fraud scheme must be governed by Chinese law rather than English law. The decision addresses a preliminary legal question in a case stemming from investment scams orchestrated by Zhimin Qian between 2014 and July 2017, which collected approximately 40.23 billion yuan (roughly £4.1 billion) through roughly ten schemes operating under entities including "Tianjin Lantian Gerui Electronic Technology." Qian fled to Myanmar in 2017, later arriving in London, where she and an associate converted cryptocurrency into other assets before Metropolitan Police seized over 61,000 BTC from storage and residential locations.
The judge rejected arguments that English law should apply, finding that the underlying contracts, investor transactions, and Bitcoin purchases all originated in China, meaning the cryptocurrency's physical location in England did not alter which legal framework governed ownership rights. He also dismissed the notion that English law should be default when Chinese law's specifics had not yet been presented in court, clarifying that identifying applicable law precedes determining its content. Under the Proceeds of Crime Act, victims must establish ownership interest in the recovered property, not merely prove financial loss.
The ruling leaves unresolved whether individual claimants can demonstrate ownership rights under Chinese law or what recovery amounts they may ultimately receive. The court has not yet assessed victims' proprietary claims against the standards of Chinese jurisprudence.