Victims of a Chinese investment fraud are challenging a UK plan to compensate them via a Chinese redress scheme, arguing that the proposal could allow British authorities to retain a significant portion of the upside from roughly 61,000 seized Bitcoin.
According to the Financial Times, citing court documents, the dispute has moved to the UK High Court as victim groups seek to recover funds tied to the cryptocurrency confiscated in a London police money-laundering investigation. The Bitcoin haul, currently worth around £3.2 billion ($4.3 billion), has appreciated sharply since it was seized.
Concerns over fair compensation
Law firm Candey, representing roughly 5,700 victims, said the proposed compensation plan may not guarantee fair restitution. The fraud reportedly affected over 128,000 Chinese investors between 2014 and 2017, with proceeds eventually converted into Bitcoin and moved abroad.
The case underscores growing legal complexities around crypto seizures, where asset values can increase significantly between confiscation and restitution.
Prosecutors raise overcompensation concerns
Prosecutors have argued that some claims could allow certain victims or litigation funders to recover amounts exceeding their actual losses.
Martin Evans KC, representing the Director of Public Prosecutions, told the court the claims risk benefiting “a small subset of victims and their litigation funders” while excluding other victims and the Crown.
Candey defended its legal action, noting that court proceedings provide the best chance for victims to secure proper compensation and emphasizing that its legal fees are capped at 18% of any recovered funds.
A preliminary hearing is set for July to decide whether English or Chinese law should govern the claims, while the High Court has set May 22 as the deadline for claimants seeking recovery under Section 281.
Seizure linked to London mansion attempt
The UK authorities confiscated over 61,000 BTC in a 2018 raid on a London property tied to Jian Wen, later convicted of money laundering, and Zhimin Qian, the fraud mastermind, who was sentenced to over 11 years in prison in November 2025.
Wen drew attention after attempting to purchase a luxury London mansion with Bitcoin, failing to explain the source of the funds.
In 2024, victims of the scheme approached Chinese authorities for help in recovering the seized Bitcoin.
The confiscated cryptocurrency has also attracted policy attention in the UK, with 2025 reports indicating that officials were examining how and when such holdings could be liquidated.
