British officials are considering whether to maintain billions of dollars from seized Bitcoin tied to massive fraud cases rather than distributing the latest value to victims, according to the Financial Times.
According to a Financial Times report on Thursday, the UK High Court may decide to reimburse victims of fraud only the original value of their investments of around £640 million ($862 million). This is despite 61,000 Bitcoin (BTC) worth nearly $7.24 billion at the time of writing, but still exceeding about $6.4 billion.
Bitcoin was seized by a scammer in north London in 2018 and scamended 128,000 Chinese investors. Some finance authorities have personally debated whether windfall will help offset a fiscal deficit of up to 30 billion pounds ($40.5 billion). Assets seized under the Crime Proceeds Act, under the existing rules, are usually paid to the Home Office or the Ministry of Finance Consolidated Fund, with court order compensation as required.
The FT also reported that other government officials are urging caution as such decisions could lead to a complex legal battle over Bitcoin revenue that could be dragged over many years. The Ministry of Finance has been instructed not to use the funds in its calculations.
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The assets in question were seized from Chinese national Zhimin Qian, who pleaded guilty earlier this week, and her Malaysian assistant, Seng Hok Ling. Local police said they “made what is believed to be the largest cryptocurrency attack in the world.”
The attack followed a seven-year investigation into international money laundering by the London Metropolitan Police Economic Crime Team. Qian pleaded guilty to the acquisition and possession of criminal property, while Ling pleaded guilty to the transfer of criminal property.
Between 2014 and 2017, Qian led a massive fraud scheme in China, sucking up assets from over 128,000 casualties. These assets were later saved as Bitcoin when she escaped from China using false documents and entered the UK.
In September 2018, Qian tried to acquire the property and wash the proceeds. Police were able to find her by monitoring Ling, and was arrested in April 2024, leading to the seizing of encrypted devices, cash, gold and cryptocurrency.
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Earlier this month, Canadian police seized a $40 million code from Tradeogre.
In mid-August, the U.S. Department of Justice approved the seizure of more than $2.8 million in cryptocurrency, along with cash and other assets, as part of a criminal case against the alleged ransomware operator. In early July, Bloomberg reported that the US Secret Service had seized nearly $400 million in digital assets over the past decade.
The Swedish Justice Minister called on local governments to focus on crackdowns that could lead to greater seizing of assets, including cryptocurrencies.
In June, US Crypto Exchange Coinbase announced that the US Secret Service would help seize $225 million on Crypto, allegedly stolen by a scammer, the biggest crypto attack ever.
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