Chinese prosecutors are seeking to seize more than 61,800 Bitcoin connected to a multibillion-dollar investment fraud scheme, following a British court ruling that Chinese law should govern victims’ claims to the cryptocurrency.

Chinese authorities have initiated proceedings to confiscate more than 61,800 Bitcoin associated with an alleged investment fraud scheme that collected approximately 40.378 billion yuan, equivalent to roughly $5.7 billion, from investors. The case centres on Qian Zhimin, who allegedly controlled Tianjin Lantian Gree Electronic Technology, a company accused of operating an extensive fraudulent investment operation between 2014 and 2017. Prosecutors say the business marketed unauthorized wealth-management products to more than 102,000 investors, promising guaranteed principal protection and substantial financial returns. Investors reportedly suffered losses approaching 20 billion yuan after the operation collapsed.

According to prosecutors, the company diverted money collected from investors into activities unrelated to its advertised investment products. Rather than financing legitimate business operations, funds allegedly supported fictitious projects, payments to earlier investors, cryptocurrency purchases and acquisitions of luxury property, vehicles and jewelry. The arrangement relied partly on incoming investments to satisfy obligations to existing participants, creating an unsustainable financial structure. Qian fled China in 2017 and subsequently relocated to the United Kingdom, where British authorities eventually seized a substantial collection of assets linked to the investigation.

The assets recovered in Britain included more than 61,800 Bitcoin, along with holdings in Bitcoin Cash, Bitcoin Gold, Bitcoin SV, XRP and Dogecoin. Authorities also confiscated cash, jewelry and investment assets believed to be associated with the alleged fraud. On October 13th, Tianjin’s Second Intermediate People’s Court accepted an application from Chinese prosecutors seeking to confiscate the property as proceeds of illegal activity. The court established a six-month period during which victims and other interested parties can participate in the proceedings. Individuals who do not formally join the case may still be eligible to recover compensation from assets ultimately recovered through the legal process.

The Chinese proceedings follow a significant ruling by the United Kingdom’s High Court concerning ownership claims over the seized cryptocurrency. The British court determined that Chinese law, rather than English law, should govern the assessment of alleged victims’ property rights to the Bitcoin held by British authorities. However, the decision did not resolve whether individual investors are legally entitled to specific portions of the cryptocurrency. Further hearings are expected to determine how Chinese property law applies to those claims, while lawyers representing some victims are pursuing an appeal of the ruling.

The dispute represents one of the largest cryptocurrency-related fraud recovery cases involving Chinese investors and assets seized overseas. The substantial Bitcoin holdings have also introduced complications because their market value may have increased considerably since authorities first recovered them. As proceedings continue in both China and the United Kingdom, courts will need to address competing claims to the confiscated property and determine how recovered assets should be handled. The outcome could have significant implications for victims seeking restitution from cryptocurrency holdings connected to large-scale international financial fraud.

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Originally published on Canadian Fraud News.