From Decrypt · By Decrypt Agent
In brief
The High Court in London ruled that Chinese law applies to victims' claims on 61,000 BTC seized in the case of fraudster Zhimin Qian.
English law had been seen as more favorable to the victims, who must show they own a share of the Bitcoin to succeed.
Lawyers for the victims plan to appeal, while the content of Chinese law and how it applies to the claims will be decided later.
The UK government's chances of keeping a 61,000 BTC haul seized from convicted fraudster Zhimin Qian have improved after the High Court in London ruled on Monday that Chinese law should govern victims' claims to the coins.
The Bitcoin is worth about $5 billion at its current price of around $83,200, per CoinGecko data.
BitcoinBTC · USD$83,313−3.39%Oct 6Oct 8Oct 10Oct 11Oct 13$86.6k$84.6k$82.7k$80.7k24h HighHigh$84,07424h LowLow$81,018VolVol$1.3BMarket projectionsOdds by MyriadToday$82,000 to $84,000$82k–$84k77% chanceThis weekBelow $84,000Below $84k60% chance→Buy Bitcoin with USDTPowered by JupiterPrice data by CoinGeckoCoinGeckoMore Bitcoin news and projections →Qian was jailed for more than 11 years last year after pleading guilty to fraud and money laundering charges over a Ponzi scheme that defrauded investors in China between 2014 and 2017. According to the ruling, at least 128,409 investment contracts were entered into, and victims paid in about RMB 40.2 billion, roughly £4.1 billion. About RMB 34.1 billion of that was paid back out to some victims.
Thousands of victims have applied under the Proceeds of Crime Act to have parts of the Bitcoin declared theirs. To succeed, each must show a proprietary interest in the coins, Justice Mark Turner wrote, because the law creates no broader compensation scheme for people who lost out to crime.
English law had been seen as substantially more favorable to the victims, the Financial Times reported, because it could have let them argue the Bitcoin belonged to them.
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Chinese law applies
Turner sided with the Director of Public Prosecutions, who heads the Crown Prosecution Service and brought the case, finding that the fraud, the victims' payments and the contracts all took place in China. "The relevant damage occurred in China. The Applicants parted with their money in China," he wrote.
The judge reached the same answer under each of the legal routes he considered, concluding that the governing law "is Chinese law." Because the Bitcoin was bought in China, he added, tracing the coins in England cannot revive any property rights the victims lost under Chinese law when that purchase took place.
The decision does not settle who keeps the Bitcoin. Questions about the content and proof of Chinese law are matters for a later stage, Turner wrote. Prosecutors have previously said victims could be compensated through a redress scheme run from China.