Some members of the U.K. government are considering keeping some of the seized Bitcoin.
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(Image credit: Shutterstock) The British Metropolitan Police seized more than 61,000 Bitcoins earlier this month from convicted Chinese national Zhimin Qian, also known as Yadi Zhang and dubbed the "Bitcoin Queen." Now, China and the U.K. government are working together to trace the movement of the stolen funds and identify additional fugitives, with the hope of returning the funds to the victims. According to the South China Morning Post , police in Tianjin, a city in the northern part of the country, are "doing everything possible" to track the more than 128,000 investors who were duped by fake investment schemes from 2014 through 2017.
The syndicate converted the proceeds from the crime into Bitcoin and property to hide their tracks, but Qian's guilty plea has finally allowed the authorities to begin recovery efforts. However, the cross-border nature of the crime, the large number of victims, and the skyrocketing value of Bitcoin have complicated matters. Tianjin authorities have already contacted claimants via an online platform, but they've warned them that the process can take time. A few experts even doubted whether the victims would be compensated at all.
Aside from determining each person's eligibility to claim the returns, the British government also has to determine whether the cash used to buy the crypto originated from the scam or was mixed with proceeds from other criminal activities. Furthermore, when the British police seized the digital wallets in 2018, one Bitcoin was valued at less than $10,000, trading for less than $ 3,300 near the end of the year.
Chinese victims of convicted 'Bitcoin Queen' may have trouble getting their $7.3 billion back from UK government
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However, it sits at around $110,000 today, even breaking its all-time high of over $125,000 earlier in October. This is a more than 30x increase in value, but it's unclear whether this growth will be disbursed equally among the victims or if they will only receive the original value they lost.
So, even though the seizure had an initial value of more than US$200 million, it's now estimated to be worth over US$6.7 billion. It's suggested that the U.K. will set up a compensation scheme for the victims, but it seems that they'll only get the verified amount that they were scammed out of, not the more than 3,000% increase in Bitcoin value.
Some members of the British government want to keep most of the seized Bitcoin, suggesting they will only return the original sum. However, others have cautioned against this, as it will likely cause diplomatic tension and would not be a good look internationally for the U.K. Furthermore, there's bound to be a protracted legal battle before the funds can even be released — whether to the victims or the British government.
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Key considerations
- Investor positioning can change fast
- Volatility remains possible near catalysts
- Macro rates and liquidity can dominate flows
Reference reading
- https://www.tomshardware.com/tech-industry/cryptomining/SPONSORED_LINK_URL
- https://www.tomshardware.com/tech-industry/cryptomining/chinese-and-british-authorities-work-together-to-determine-how-to-return-61-000-stolen-bitcoins-worth-usd6-7-billion-victims-expected-to-have-hard-time-recouping-losses-despite-seizure#main
- https://www.tomshardware.com
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