UK Prosecutors Propose Compensation Scheme in Landmark Bitcoin Case Involving Chinese Victims

A Promising Signal Amid a Complex Cross-Border Tug-of-War

This article was first published on Caixin.com on 📅 17/10/2025

On 15 October, the High Court in London heard submissions from the Director of Public Prosecutions, who proposed establishing a compensation scheme for victims of the Chinese “Lantian Gerui” investment fraud. The move signals an effort by UK authorities to respond—within a judicial framework—to intense public concerns and to explore how justice, fairness, enforceability and practicality can coexist in cross-border asset recovery. It also marks a decisive shift in the Zhimin Qian (a.k.a. Yadi Zhang) case: the vast crypto holdings seized by UK law enforcement have now entered the deep-water stage of judicial recovery and distribution. The question of how to balance state interests, public justice, and the rights of more than 100,000 Chinese victims has become the new institutional focal point.

From Guilty Plea to Global Focus

After Qian’s guilty plea in London at the end of September, the 60,000-plus Bitcoins seized by UK authorities drew worldwide attention. Coincidentally, on 14 October, the US Department of Justice announced the seizure of over 120,000 Bitcoins—worth an estimated US $15 billion—from a crackdown on Cambodian “pig-butchering” telecom fraud.

Different jurisdictions, same pattern: illicit proceeds transformed into cryptocurrency, moved across borders, and ultimately frozen within Anglo-American legal systems.

The parallel highlights a broader trend—cryptoassets have become the shared battlefield of international asset recovery and victim restitution in economic crime cases.

While the UK and the US take technically distinct routes in their efforts to recover digital assets, ultimately they converge and confront the same issue: when criminal proceeds exist in crypto form, how should the competing interests of the state, the justice system, and victims be reconciled?

The sheer size of the Qian Zhimin fraud, though now overshadowed by the Cambodian case, involves vast sums and impacts over 100,000 victims, warranting the ongoing focus of Chinese and British governments, regulators, and the press. Crucially, the case has moved beyond a typical cross-border legal case; it has become a practical examination—a reality test—of the two nations' judicial systems, law enforcement cooperation, and asset return processes.

A Shift from Criminal Conviction to Asset Allocation: A New Phase of Contest

During the criminal phase, Chinese and British authorities pursued a common goal—securing a conviction through evidence-sharing.

Now, with conviction achieved, the case enters a new and delicate phase: the contest over ownership of the seized assets.

Chinese victims naturally hope to see restitution. The UK government, facing record fiscal deficits, has its own interest in a potential windfall; Chancellor Rachel Reeves has already indicated that the Treasury is closely following the case.

The Crown Prosecution Service (CPS) began civil-recovery proceedings in September 2024 under Part 5 of the Proceeds of Crime Act 2002 (POCA), pledging not to seek a forfeiture order until victims had been given a “reasonable period” to file claims under Section 281. A year later, the CPS’s proposal of a compensation scheme represents the first tangible policy step toward distribution—an encouraging procedural development, but also the beginning of a much harder test.

Victims’ “Private Route”: Section 281 POCA

Only a handful of Chinese law firms, working with UK solicitors, have filed Section 281 applications on behalf of several thousand investors. For the vast majority—tens of thousands—participation remains practically out of reach. Cross-border claims of this kind are costly, technically complex, and slow.

The risk is clear: stronger investors press ahead; weaker ones fall silent. Some claimants also acted as early promoters or downline recruiters, blurring the line between victim and participant. The High Court will almost certainly have to classify victims by responsibility and entitlement.

Section 281, intended to balance private rights and public interest, is a high-bar discretionary procedure. Historically, Section 281 POCA has been used sparingly. Applicants must demonstrate a proprietary interest in the seized property—not merely creditor status.

Only two notable precedents exist:

• NCA v Robb [2014] EWHC 4384 (Ch), the total number of investors was unknown but estimated to be no less than 178. Out of this group, only 71 claimants came forward; the court vetted 8 lead claimants and issued a ruling after tracing their funds through through multiple accounts;
• NCA & NatWest v Odewale [2020] EWHC, where the bank recovered property misappropriated through identity fraud.

Applying Robb-level scrutiny to thousands of Chinese investors would entail massive evidentiary and logistical burdens, making large-scale success improbable.

The Compensation Scheme: Progress — and the Real Test

At the October 15 hearing, DPP Parkinson outlined plans for a compensation scheme for Chinese victims. Although still conceptual and subject to High Court approval, the proposal indicates the UK’s intent to move from mere asset seizure toward structured distribution and restitution.

In theory, victims with Section 281 applications will be assessed first; others may join through the broader court-approved scheme. The High Court would appoint a Trustee for Civil Recovery, nominated by the CPS, to take possession of the assets, manage liquidation, and administer compensation—akin to a judicial liquidation. The trustee, as an officer of the court, must report regularly and comply with judicial directions on distribution and costs.

This move marks procedural progress—but the real test lies in whether the scheme can be designed and delivered in a way that genuinely serves justice.

Victims are an important stakeholder, yet not the only one. The High Court will ultimately review a detailed proposal and scrutinise how it balances competing legal and equitable interests. Not all victims are entirely blameless; any fair scheme must acknowledge differing degrees of responsibility.

The practical challenges would be formidable, including:

• designing a transparent, workable, efficient, and verifiable claims process;
• enabling participation by large numbers of genuine Chinese victims, class definition, and evidentiary thresholds;
• determining the valuation basis—original investment versus appreciated Bitcoin value; and
• reconciling proprietary interests under section 281 with the broader compensation pool to avoid conflicts.

These are not procedural details; they are the determinants of fairness and feasibility. It will be unprecedented in both scale and complexity.

It needs to be noted, the High Court has imposed a Privacy Measures Order, restricting public access to filings to protect asset integrity. Transparency, however, may become an issue as the process unfolds.

The “Official Route”: Mutual Legal Assistance and Asset Return

Beyond private claims, China could seek asset return through mutual legal assistance mechanisms.

Both countries are signatories to the UN Convention against Corruption (UNCAC) and the UK–China Treaty on Mutual Legal Assistance in Criminal Matters (2013).

Articles 54 and 57 of UNCAC require cooperation in enforcing foreign confiscation orders, while granting discretionary return for non-public funds. 

Article 20 of the bilateral treaty likewise allows the UK to return or share recovered assets within its legal constraints.

In theory, if a Chinese court issues a confiscation ruling under Article 298 of China’s Criminal Procedure Law—the “special procedure for confiscation of unlawful gains”—and satisfies dual-criminality and human-rights standards, the UK could, in principle, recognise and enforce it. Yet because China’s special procedure remains criminal in nature, procedural alignment of the cross-system enforcement is technically challenging.

Practically, the UK’s civil recovery process is moving faster and under its own momentum. Once a civil recovery order and compensation scheme are approved, restitution will be administered within the UK system. Should the UK later recognise a Chinese order, distribution could shift accordingly. In either case, both sides must guard against double recovery.

From the US seizure of crypto proceeds to the UK judicial handling of Qian’s assets, it is evident that the frontline of international asset recovery has shifted from traditional bank accounts to crypto wallets—a structural challenge for global legal cooperation.

Bitcoin Liquidity and Realisation

With Bitcoin capped at 21 million and roughly 13 million in circulation, liquidating 60,000 coins is a major task.

A phased, market-neutral strategy will therefore be essential. Key considerations include:

• using regulated financial institutions for OTC or staged sales;
• deploying derivatives to hedge volatility; and
• complying with FCA oversight and capital-gains-tax obligations.

Such arrangements will fall under the supervision of the court-appointed trustee and co-trustees, potentially involving accounting and law firms to ensure secure and compliant realisation.

Recent crypto-market turbulence, marked by steep declines in major altcoins, is a stark reminder that digital assets are not stable stores of value but amplifiers of volatility.

For trustees, this means managing both price and liquidity risk. The success of a truly “market-neutral” liquidation will test the maturity of the UK’s legal and regulatory response to digital-asset cases.

Institutional Calibration in Cross-Border Recovery

The Qian case is a legal experiment without precedent. It tests not only the UK’s adaptability to digital-asset governance but also the level of trust and coordination in Sino-British judicial cooperation. For both sides, the real issue is not merely recovering Bitcoins, but developing a rule-based response to borderless economic crime.

The two major cases that emerged in succession in the UK and the US highlight the growing convergence of cross-border criminal typologies and asset forms. Yet they also underscore the tension placed on national judicial response models worldwide, which are increasingly challenged in handling novel cases of such complexity. These developments may herald a new international asset recovery framework that is taking shape.

Victims remain a crucial—but not the only—stakeholder. The ultimate challenge before the English High Court lies in designing a cross-border compensation mechanism that is fair, functional, and economically viable. Its success—or failure—will determine whether this becomes a replicable precedent for transnational economic crime recovery.

Ultimately, the true test is not who gets the cryptos and cashes out at a good price, but whether nations can institutionalise cooperation to build a global legal order capable of confronting digital-asset crime.