Chinese scam victims lose bid to recover 61,000 bitcoin in key court battle

Victims of a Chinese scam who sought to recover 61,000 bitcoin seized by authorities face a legal setback after a UK court ruled that Chinese law governs their claims.

Victims of a Chinese scam seeking to recover 61,000 seized bitcoins face a legal setback after a UK court ruled that Chinese law governs their claims.

Victims of a Chinese scam seeking to recover 61,000 bitcoins seized by the British government have lost a key legal battle after London's High Court ruled that Chinese law, rather than English law, should govern claims to the assets.

On Monday, Judge Mark Turner rejected arguments that English law or a combination of English and Chinese law should apply to the victims' property claims. The judge ruled that Chinese law should determine whether the claimants have property rights in the seized bitcoins, leaving the validity of the claims for further proceedings.

"The relevant damage occurred in China. Applicants separated their money in China," Turner wrote. "Consequent contractual relations were concluded in China."

The dispute stems from an investment fraud scheme orchestrated by Ximin Qian between 2014 and 2017, and assets were seized by British authorities during a money-laundering investigation. In March, victims challenged a proposed compensation deal involving a Chinese reparations scheme, arguing that it could hand over many of the benefits of Bitcoin's rise to British authorities.

The victims sought to apply English law because it would have allowed them to claim direct ownership of the bitcoins rather than simply seeking compensation as creditors. However, the UK ruling does not determine who ultimately owns the seized assets, and the victims' property rights are still subject to assessment under Chinese law.

Law firm Field Fisher, which represents the plaintiffs in the dispute, is pursuing an appeal against Turner's ruling, according to the Financial Times.

Despite this ruling, the case will remain in London's High Court instead of being transferred to a Chinese court. The FT reported that the next step would involve expert evidence on Chinese law to determine whether victims could establish an ownership interest in bitcoins.

The Crown Prosecution Service told the FT that another hearing will examine how Chinese law applies and whether victims can show an interest in seized assets.

According to previous coverage by Cointelegraph, the dispute involves more than 128,000 investors who were previously reported to have been affected by the scam. In March, Cointelegraph reported that Candey's law firm represented around 5,700 victims.

Prosecutors previously argued that some claims could allow a smaller group of victims and lawsuit sponsors to recover more than their actual damages.

According to CoinGecko, seized bitcoins are currently worth more than $5 billion.