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Who owns the appreciation on seized bitcoin?

2026-09-08 · Illicit Finance Zhimin Qian converted £20.2 million of fraud proceeds into bitcoin, and by the time the United Kingdom seized it the holding was worth around £4.8 billion. The English High Court is now deciding a question with roughly £4 billion riding on it,…

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2026-09-08 · Illicit Finance

Zhimin Qian converted £20.2 million of fraud proceeds into bitcoin, and by the time the United Kingdom seized it the holding was worth around £4.8 billion. The English High Court is now deciding a question with roughly £4 billion riding on it, and almost nobody covering the case has noticed what it is.

Key findings

  • The appreciation is worth about eight times the fraud. The Crown Prosecution Service puts the underlying loss at approximately £600 million across 128,000 victims. The bitcoin bought with £20.2 million of that money was valued at approximately £4.8 billion at sentencing in November 2025.
  • The £4 billion turns on a choice-of-law question, not a valuation question. English equitable tracing and Chinese law give opposite answers about whether a defrauded investor recovers their money or a share of what their money became.
  • English law has a controlling authority and it favors the victims. In Foskett v McKeown [2000] UKHL 29, the House of Lords held that a claimant who traces into a substitute asset may take a proportionate share of that asset including its increase in value.
  • Only about 16,000 of the 128,000 victims registered a claim before the window closed on 22 May 2026, which is under 13% of them.
  • Two published accounts of the size of the underlying fraud differ by roughly eight times, and no source reconciles them.

Case file

Field Value
Matter R v Zhimin Qian and R v Seng Hok Ling; related civil recovery under Part 5 POCA 2002
Court Southwark Crown Court (criminal); King’s Bench Division of the High Court, case-managed from Manchester (civil recovery)
Statute Proceeds of Crime Act 2002, ss 243 and 281; Part 5 Property Freezing Order
Sentenced 11 November 2025
Sentences Qian 11 years 8 months; Ling 4 years 11 months; Jian Wen (2024) 6 years 8 months
Underlying fraud China, 2014 to 2017, approximately 128,000 victims, approximately £600 million
Converted to bitcoin £20.2 million
Seized Over 60,000 BTC, approximately £4.8 billion at sentencing
Confiscation Ling, £5,603,305.81, ordered 22 January 2026
Posture as of 3 August 2026 Criminal matters concluded. Civil recovery live; applicable-law question heard July 2026, no ruling published

What the record shows

What were Qian and Ling convicted of, and when?

Zhimin Qian, also known as Yadi Zhang, 47, a Chinese national, and Senghok Ling, 47, a Malaysian national, were sentenced at Southwark Crown Court on 11 November 2025. Qian admitted acquiring criminal property and possessing criminal property. Ling admitted possessing criminal property. Qian received 11 years and 8 months. Ling received 4 years and 11 months.

The Crown Prosecution Service states that the money came from an investment fraud carried out in China between 2014 and 2017 with over 128,000 victims and losses of approximately £600 million. Of that, £20.2 million was converted into bitcoin. The Metropolitan Police seized over 60,000 bitcoin, described by the CPS as the largest cryptocurrency seizure by law enforcement in the United Kingdom, and valued in the November 2025 release at approximately £4.8 billion.

Red Lion Chambers, whose members Gillian Jones KC and Max Baines appeared in the prosecution, records that Qian and Ling pleaded guilty on 30 September 2025, and that a third defendant, Jian Wen, was convicted in 2024 and sentenced to 6 years and 8 months. Jian Wen does not appear in the CPS release covering the November 2025 sentencings.

What happened to Ling’s money?

On 22 January 2026 Southwark Crown Court made a confiscation order against Ling in the sum of £5,603,305.81, payable within three months, with eight years’ imprisonment in default. The CPS states that the judge determined his benefit from criminal conduct at £5,603,305.81 and then made the order in the sum of his available assets, which were valued at the same figure. [P] The cryptocurrency involved had already been converted into sterling, amounting to £5,417,995.24.

Red Lion Chambers describes more than £14.2 million as subject to confiscation in respect of Ling. The CPS figure of £5,603,305.81 is the order actually made. Under the Proceeds of Crime Act 2002 a court determines a defendant’s benefit and then makes an order capped at the assets available to satisfy it, so a benefit figure and an order figure routinely differ. The two numbers are not necessarily inconsistent, and neither source states which is which.

Where is the rest of the bitcoin, legally speaking?

The seized holding is not resolved by either sentence. It sits in civil recovery proceedings under Part 5 of the Proceeds of Crime Act 2002, subject to a Property Freezing Order with litigation receivers appointed. Writing on 7 June 2026, Jackson Ng MCIArb, Partner and Barrister at Duan & Duan UK LLP, records that the proceedings are in the King’s Bench Division of the High Court, case-managed from Manchester, under sections 243 and 281 of the Proceeds of Crime Act 2002.

Ng identifies the substantive issue as how the English law of equitable tracing, and the choice between English and PRC law to govern it, operates against an asset class that did not exist when the foundational tracing authorities were decided.

That sentence is the entire case, and it is worth unpacking.

Why the governing law decides who gets £4 billion

Under English law, tracing is not itself a claim. It is the process of identifying what a claimant’s property turned into. Once the process succeeds, the claimant chooses a remedy, and the choice is the whole argument here.

In Foskett v McKeown [2000] UKHL 29, [2001] 1 AC 102, decided 18 May 2000, the House of Lords held by a majority of three to two that a claimant who traces trust money into a substitute asset may elect to take a proportionate beneficial share of that asset, including any increase in its value, rather than being confined to a lien for the sum originally taken. [Q] Lord Millett put the basis for it in terms that matter to a case about an asset that appreciated 200-fold: “The transmission of a claimant’s property rights from one asset to its traceable proceeds is part of our law of property, not of the law of unjust enrichment.”

Property, not unjust enrichment, is not a technicality. An unjust enrichment claim asks what it would be fair to give back, and fairness arguments can be met with discretion, change of position, and proportionality. A property claim asks what the claimant already owns. If a victim’s money is traceable into the bitcoin, and English law governs the tracing, then on Foskett the victim owns a share of the bitcoin, and a share of a thing that appreciated is worth what the thing is worth now.

The competing position is that Chinese law governs, under which recovery is reported to be limited to the original principal and interest.

How many victims are actually claiming?

Approximately 16,000 Chinese victims entered the United Kingdom civil recovery process before a registration window that closed on 22 May 2026, representing under 13% of the 128,000 victims of the underlying scheme.

The figures that do not agree

Two accounts of the size of the underlying fraud are in circulation and they are not close.

Source Victims Loss Bitcoin Value stated
CPS, Nov 2025 128,000 approx. £600 million over 60,000 BTC approx. £4.8 billion
Caixin Global, July 2026 approx. 130,000 over 40 billion yuan over 61,000 BTC over $3.8 billion

£600 million and 40 billion yuan are different by roughly eight times. The CPS figure is the one used in the sentencing exercise and is. The Caixin figure is and unreconciled. The value gap between £4.8 billion and $3.8 billion is not a contradiction: they are the same holding priced eight months apart in a falling market, which is itself a fact about what is being fought over.

Cite as: Max Avery, “Who owns the appreciation on seized bitcoin?”, maxavery.org, 8 September 2026. Primary sources: CPS press releases of 11 November 2025 and 22 January 2026; Foskett v McKeown [2000] UKHL 29.

What I think is going on

Every headline on this case leads with £4.8 billion or £5 billion, because it is the largest cryptocurrency seizure any state has ever made and the number is astonishing. The number is also the least interesting thing here.

Here is what I think the case is actually about. Zhimin Qian took roughly £20 million from Chinese savers and bought bitcoin with it. That decision, made by a criminal for criminal reasons, turned out to be the single best investment decision available to anyone in that decade. The victims lost about £600 million in total; the fraction of it that went into bitcoin is now worth several times everything they collectively lost. Somebody is going to receive roughly £4 billion of pure appreciation on stolen money, and the only question is who.

There are three candidates and the arguments are not equally good.

The state. Civil recovery under Part 5 exists so that criminal property does not stay with criminals, and the default beneficiary of a recovery order is the Crown. This is the outcome that happens by inertia if the victims’ claims fail. It is also the outcome that would let the Treasury book several billion pounds of gain on money stolen from Chinese pensioners, which is defensible in law and hard to look at.

The victims, at their loss. Give each registered claimant their principal back, perhaps with interest. This is clean, it is what Chinese law is reported to provide, and it has the enormous practical advantage that £600 million is comfortably available inside a £4 billion pot. Everyone gets whole. The state keeps the rest.

The victims, at a share of value. This is what Foskett points to if English law governs the tracing. A saver who put in the equivalent of £10,000 in 2016 does not get £10,000 back. They get a proportionate slice of what their £10,000 became, and that could be a life-changing multiple.

My read is that the choice-of-law fight is being conducted as a technical private international law question because stating it plainly is uncomfortable for everybody. Plainly stated, the state’s position produces a windfall for the state, and the victims’ position produces a windfall for a self-selected 13% of victims who found their way into an English court process by 22 May 2026. Neither is obviously just. The 112,000 people who did not register are the group nobody is arguing for, and under either outcome they are unlikely to see the appreciation.

I also think the tracing point is harder than the coverage suggests. Foskett concerned a clean substitution: identifiable money in, identifiable asset out. Qian’s £20.2 million was converted over a period, through intermediaries, into a holding that was later consolidated and moved. English tracing rules cope badly with mixing, and the Prime Trust liquidation showed a court accepting expert evidence that repeatedly condensing multiple unspent outputs into new ones defeats attribution of specific coins to specific customers. Any victim who can trace only into a mixed fund faces the same wall, and a proportionate-share remedy needs a successful trace first. That the High Court heard argument in July 2026 and has not published a ruling is consistent with a question that is genuinely difficult rather than merely large.

The reason this case matters far beyond Qian is that it is the first time a court of this standing has had to decide what a defrauded person owns when the fraudster’s laundering choice turns out to be brilliant. The answer will govern every future case where seized crypto is worth more at judgment than at theft, which, given the asset class, is most of them.

What reduces your exposure

Nothing in your own structure changes the outcome of this case. If you are defrauded and the proceeds are seized by a state, what you recover is decided by insolvency-adjacent doctrine, private international law, and whether a registration window opened somewhere you were watching. That is the honest lesson and it is not a reassuring one.

Two things do follow from it, and both are about records rather than products.

Being able to trace is a documentation problem before it is a legal one. A proportionate share of a recovered asset is available only to a claimant who can show what they paid, when, in what currency, to which entity, and what came back. Victims in this case are being asked for exactly that. Contemporaneous records of every transfer into any investment platform, kept outside that platform, are the difference between a provable claim and a place in a queue.

Registration windows close, and they are not advertised to you. Roughly 87% of the victims here are outside the process, and the deadline was 22 May 2026. If you have ever lost money to a platform that later became a criminal matter in another jurisdiction, the recovery process will not find you. Somebody has to be watching for it.

Neither point protects anyone from being defrauded. They change what is recoverable afterward, which is a smaller claim and a true one.

Sources

Disclosure. Max Avery is affiliated with Digital Ascension Group (DAG). Investment advisory services are offered through DAG Wealth, an SEC-registered investment adviser (CRD No. 328627). Registration does not imply a certain level of skill or training. DAG is not a law firm and does not provide legal or tax advice. Custody arrangements with third-party independent qualified custodians reduce certain risks but do not eliminate them. Nothing here is investment, legal, or tax advice, or a recommendation to buy or sell any asset. This article describes matters of public record; charges are allegations and defendants are presumed innocent unless and until proven guilty.

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