(Yicai) Oct. 14 -- The Tianjin No. 2 Intermediate People’s Court has accepted a case seeking the confiscation of more than USD5 billion in alleged illicit proceeds connected to a suspected fund-raising fraud by Qian Zhimin, who is currently serving a prison sentence in the United Kingdom for cryptocurrency money laundering.

The assets that prosecutors in Tianjin have asked the court to confiscate include nearly 62,000 bitcoins worth about USD5.1 billion at current market prices, as well as other cryptocurrencies, cash, jewelry and financial assets, the court said yesterday. It accepted to hear the case on Sept. 28.

Qian marketed fraudulent wealth-management products in multiple locations across China from April 2014 to August 2017 in the name of the company Tianjin Lantian Gerui Electronic Technology, of which she was actual controller, according to the application filed by prosecutors and disclosed in the court’s announcement. The scheme raised nearly CNY40.4 billion (USD6 billion).

The funds were used to repay principal and interest on maturing wealth-management products, operate fake investment projects, acquire large amounts of bitcoin and purchase real estate, cars and jewelry. The vast majority of the money was not used for productive business activities. More than 102,000 investors suffered losses totaling over CNY19.9 billion (USD2.9 billion).

In July 2017, Qian fled overseas with a computer containing a bitcoin wallet, moving between multiple locations before eventually reaching the UK. During that period, she converted some of the bitcoin into other assets, which were held, spent or dissipated by other individuals on her behalf.

The Hedong District People’s Procuratorate in Tianjin approved Qian’s arrest in January 2018 and Interpol issued a Red Notice for her in February that year. Qian was arrested by British authorities in April 2024.

British judicial authorities subsequently seized assets believed to represent Qian’s illicit proceeds, according to the court announcement. These included more than 61,800 bitcoins, over 72,700 bitcoin cash tokens, more than 3.6 million XRP tokens as well as cash and jewelry.

Prosecutors in Tianjin argue that Qian’s illicit proceeds, assets converted from these proceeds and any income generated by them should be recovered and confiscated, except for amounts returned to affected investors in accordance with the law.

The Tianjin No. 2 Intermediate People’s Court said that affected investors may participate in the proceedings as interested parties. Those who choose not to participate will not lose in their right to receive compensation from the recovered assets.

Meanwhile, legal proceedings in the UK have also taken a new turn. According to foreign media reports, the UK High Court recently ruled that Chinese law, rather than English law, should govern a dispute over ownership rights involving the approximately 61,000 bitcoins. At the heart of the choice-of-law dispute is whether victims can claim a share of the substantial appreciation in the value of the bitcoins in question.

The reports said that UK prosecutors previously told the court that victims could receive compensation through a mechanism administered by Chinese authorities. The Crown Prosecution Service said the court will hold further hearings to determine whether the victims could prove their legal interests in the bitcoins.

Editor: Kim Taylor