The UK government wants to keep $7 billion on stolen bitcoin

The UK government is trying to maintain most of its $7 billion Bitcoin This week, it was seized in connection with Chinese investment fraud, following the conviction of a suspected fraud organizer.

Zhimin Qian pleaded guilty to count of owning and transferring criminal property to Southwark Crown Court on Monday following a conviction last year on similar numbers of assistant Seng Hok Ling (also known as Jian Wen).

The conviction now raises questions about who will maintain the 61,000 BTC originally seized by British authorities in 2018, with over 120,000 victims in China seeking compensation for their losses.

The Crown Prosecutor’s Office has launched civil recovery proceedings in the UK’s High Court. This will hold the next hearing in the January case.

Victim compensation

Qian implemented a massive investment fraud scheme between 2014 and 2017, with illegally acquired funds being converted to Bitcoin.

Determining how to compensate victims of fraud can be a difficult process, but legal experts suggest that claimants are entitled to compensation as long as they can establish a sufficient link to the seized BTC.

“I don’t know if the UK law is on the UK government’s side as to whether or not we can maintain the seized Bitcoin.” Decryption.

Fairbrother noted that victims of fraud have a well-established right to file applications under Section 281 of the Crimes Act of 2002 and file claims on frozen property under the latter law.

“The usual impartial pursuit principles apply and victims can establish their own claims through a variety of flexible routes, including trust laws,” he said. “The victims are entitled to choose the route that Cherry is most advantageous to them.”

There are multiple routes to claim the rights to seized property, but the High Court may ultimately adopt an approach that is more appropriate for the UK government.

According to Fair Brother, this includes “a It’s like a step (Proportional Distribution) Approach. The victims can receive funds proportionately to their contributions.”

Fairbrother cited the case of the National Crime Agency, “by establishing each victim’s payment, each victim’s shares is calculated, and each victim’s shares is calculated by applying the same percentage to the fund.”

Such an approach could “substantially” support victims of fraud. Victims of fraud, who originally lost around £640 million to the fraud, are seeking the return of their property and profits from the market.

However, Fairbrother suggested that even if the victim’s qualifications were established as part of a civil lawsuit, they could receive compensation equal to the value they lost at the time.

“In the recent cases where I am involved, the court compensated the victim for the value of the money he lost in GBP, not in BTC,” he said. “This approach will compensate all victims who have been compensated for the value of the amount they lost in Fiat currency in order to benefit from a significant increase in the value of BTC.”

Therefore, this result could prove insufficient for the victims, and its large group is represented by the London-based international law firm Fieldfisher, which works with China’s Gen law.

In a statement DecryptionWilliam Glover and Stephen Cartwright (who are working on the case) said some of the victims had “lost their lives savings.”

“The victims have no property for about 10 years and are entitled to recover their property from Bitcoin frozen in this jurisdiction,” they said.

Glover and Cartwright also said frozen Bitcoin does not belong to the UK state.

They added that “the British state does not have the right to freely dispose of frozen Bitcoin over the legitimate legal and unique interests of its victims.”

Given that view, the approaching civil lawsuit proves controversial and could potentially extend to 2027.

Hodl or sale?

Even assuming that the UK government has established privileges to retain most of the frozen BTC, the question of whether to sell or retain funds will emerge.

Around Financial Timesan unnamed Treasury official reportedly raised personal questions about whether the codewind drop could insert $34 billion to $67 billion in UK finances. HM Treasury did not respond immediately DecryptionRequest a comment.

However, the UK government was selling seized bitcoin, and could risk repeating repeated gold sales in 1999 when gold prices were on the bear market.