Chinese authorities have started legal proceedings to confiscate nearly 62,000 bitcoins, valued at approximately $5 billion, from an individual accused of masterminding one of China’s largest financial frauds.
Major investment fraud and crypto conversion
Prosecutors have named Qian Zhimin, controller of the technology firm Tianjin Lantian Gerui Electronic Technology, as the main suspect behind the scheme. From 2014 to 2017, Qian and associates reportedly sold fraudulent wealth management products to investors nationwide, promising guaranteed returns with no regulatory approval.
Authorities report the operation raised roughly 40.3 billion yuan, or $2.8 billion, during this period. Rather than pursuing legitimate business activity, Qian allegedly used investor funds to pay off earlier participants in a Ponzi-like system. Much of the money was converted into bitcoin holdings, real estate, cars, and jewelry.
Prosecutors said that the fraud involved promising investors high returns and moving their funds into assets such as bitcoin, luxury cars, real estate, and jewelry, with little money directed towards legitimate business uses.
By July 2017, as the operation unraveled, Qian fled to the United Kingdom, reportedly bringing computers containing access to the bitcoin wallets.
Bitcoin seized in UK, court battle over control
British authorities later confiscated roughly 61,900 bitcoin—along with other cryptocurrencies, cash, and valuables—believed to be linked to Qian’s activities. The UK High Court recently determined that Chinese law, rather than UK jurisdiction, will govern any disputes over ownership of the seized bitcoins.
Since the 2017 crackdown, the value of the confiscated bitcoin has increased dramatically, making the eventual allocation of the coins to victims a critical legal battle. The UK’s Crown Prosecution Service has said that impacted investors may seek compensation under China’s asset recovery system, but Fieldfisher, a London law firm representing some victims, is reportedly considering an appeal of the court’s decision. Upcoming hearings are scheduled to determine whether victims can substantiate their claims to these crypto assets.
The Second Intermediate People’s Court of Tianjin, a mid-level court in the major Chinese city, has officially accepted the prosecution’s application as of September 28 to confiscate Qian’s illicit assets.
Mini dictionary: Crown Prosecution Service (CPS) — The CPS is the principal public agency in England and Wales responsible for conducting criminal prosecutions. It determines charges in serious criminal cases and represents the state in court proceedings.
| Asset | Quantity | Estimated Value (2024) |
|---|---|---|
| Bitcoin (BTC) | 61,900 | ~$5 billion |
| Yuan Raised | 40.3 billion | ~$2.8 billion |
| Other Assets | Cash, property, cars, jewelry | Undisclosed |
Asset recovery process and crypto regulations in China
Victims seeking restitution may now register on a designated WeChat platform, with a six-month notice period established ahead of the upcoming recovery trial. This process aims to ensure victims can participate in the distribution of any recovered assets.
China enforces some of the world’s tightest controls over cryptocurrency activity. In 2021, the Chinese government instituted a comprehensive ban on digital asset trading and bitcoin mining, positioning itself firmly against the use of crypto within its borders.
Victims will be able to apply through an official platform during a designated period before the court determines how assets will be distributed.
