China seeks to seize 61,800 BTC tied to $5.7 billion fraud scheme

Chinese prosecutors have moved to seize more than 61,800 Bitcoin linked to a massive fraud case worth over 40 billion yuan, roughly $5.7 billion, according to reporting by Chinese outlet The Paper.

The case centers on Qian Zhimin, the alleged controller of Tianjin Lantian Gree Electronic Technology. Prosecutors say that from 2014 to 2017, the company sold unlicensed wealth-management products across China, promising guaranteed principal and high returns. The scheme raised more than 40.378 billion yuan from more than 102,000 investors, who lost nearly 20 billion yuan.

This money, however, was allegedly used to repay earlier investors, run fake investment projects, buy Bitcoin and acquire property, cars and jewelry, instead of funding real businesses.

Qian then fled China in 2017 and later settled in the UK. British authorities eventually seized his assets, including more than 61,800 bitcoin, plus bitcoin cash, bitcoin gold, bitcoin SV, ripple, dogecoin, cash, jewelry and investment holdings.

On Oct. 13, Tianjin’s Second Intermediate People’s Court said it had accepted prosecutors’ request to confiscate the assets as illegal gains. The court has opened a six-month period for victims and other interested parties to join the case. Victims who do not participate can still seek refunds from recovered assets.

The development comes days after a U.K. High Court ruled that Chinese law, rather than English law, should govern alleged victims’ claims to the more than 61,000 BTC seized in Britain.

The ruling doesn’t mean that victims can never recover their coins. Instead, it calls for assessing whether the victims have a property claim under Chinese law, with further hearings expected. Lawyers for some victims are seeking to appeal.

The case is one of China’s largest alleged crypto-linked frauds—and the Bitcoin stash could be worth far more today than when it was seized.