The U.K. High Court ruled that Chinese law decides whether fraud victims own 61,000 seized Bitcoin. The court has not yet said whether they hold those rights, so the fate of the Bitcoin remains open.
The U.K. High Court ruled on October 12 that the law in China must be applied to decide whether investors have the right to ownership of 61,000 seized BTC. Mr. Justice Turner sided with the prosecutors, which could limit what around 16,000 Chinese fraud victims can recover.
Still, the court has not ruled on whether the investors actually have these rights. Instead of sharing in Bitcoin's price gains, investors may only be able to collect their initial investment plus interest.
Why the ruling matters to investors
The Chinese investors hoped to use English property law to follow the trail of their money through to the Bitcoin Qian Zhimin bought. That would potentially have let them assert rights over the crypto itself, beyond recovering their initial investment.
Turner argued that the vast majority of the fraudulent statements, investment agreements, payments, and initial Bitcoin purchases had a Chinese connection.
How the scheme built the Bitcoin stash
Qian Zhimin, also known as Yadi Zhang, formed Tianjin Lantian Gerui Electronic Technology in 2014. Between 2014 and 2017, the firm lured in investors with promises of profitable returns on investments in the digital currencies space, senior care services, and more.
Per court filings, investors signed 128,409 investment agreements that brought in around 40.23 billion yuan ($5.9 billion, per current approx. exchange rates). Some investors received payouts of 34.1 billion yuan under the structure of a Ponzi scheme.
Qian then used some of the money to buy Bitcoin. From June 2014 to June 2017, over 100,000 BTC was purchased using an account on the crypto exchange Huobi.
In October–November 2018, British police raided properties connected to Qian and her co-conspirator Jian Wen, seizing electronic devices and private keys related to the crypto. The investigation led to the seizure of over 61,000 BTC.
Source: U.Today
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