Chinese victims of crypto fraud risk losing billions in Bitcoin

Thousands of Chinese victims of a massive crypto fraud have suffered a major legal setback. A court in London has ruled that Chinese law applies to their claims to over 61,000 Bitcoin (BTC). This may make it more difficult for the victims to take advantage of the huge increase in the value of the crypto currency.

The case revolves around one of Bitcoin's biggest ever seizures. The British authorities seized more than 61,000 BTC related to a major fraud case in China.

The victims try to claim the property through the British court. But the High Court in London has now ruled that Chinese law is leading in assessing their property rights.

That's an important setback. The victims not only hope to get back their original deposit, but also to benefit from the increase in value of Bitcoin since the fraud took place.

Under Chinese law, it can be more difficult to claim that price gain. As a result, there is a risk that victims will only receive compensation based on their original loss, while the confiscated Bitcoin is now worth many billions of dollars.

The law firm Fieldfisher, which represents a group of victims, is considering appealing the ruling according to the information provided.

Central to the case is Zhimin Qian, who was involved in a large-scale investment fraud in China between 2014 and 2017.

According to the allegations, about 128,000 people fell victim to the fraudulent investment program. Investors' money was then partly converted into Bitcoin.

Qian eventually left for the United Kingdom, where the British authorities seized a huge amount of Bitcoin.

Since then, the question has been who is entitled to crypto assets. The original victims want their money back, but the sharp rise in the Bitcoin price has made the legal battle considerably more complicated.

The difference between the original value of the investments and the current value of the Bitcoin can amount to billions of dollars. That is precisely why the question of which law applies is so important.

The ruling does not mean that the victims are definitively empty-handed. However, it does determine which legal framework is used to assess their claims.

In addition to the group represented by Fieldfisher, other law firms are also involved in the case. For example, Candey represents about 5,700 victims.

The British Crown Prosecution Service (CPS), the organisation that prosecutes criminal cases on behalf of the state, is also involved in the further handling of the seized assets.

Additional court hearings are expected. In doing so, it must become clearer how the huge Bitcoin holdings are ultimately distributed and what compensation the victims can receive.

A lot is at stake for the victims. Not only their original investment, but possibly also the increase in value that Bitcoin went through in the years that followed.