A ruling by London’s High Court has boosted the U.K. government’s chances of retaining most of the 3.8 billion pounds ($5 billion) in confiscated bitcoin after determining that thousands of Chinese fraud victims cannot use English law to pursue ownership claims.

The case involves 61,000 BTC seized by the Metropolitan Police during an investigation into Zhimin Qian, who admitted to defrauding thousands of people in China.

Qian operated a Ponzi scheme between 2014 and 2017 through her company, Tianjin Lantian Gerui Electronic Technology. The scheme defrauded more than 128,000 investors, and Qian converted the stolen funds into bitcoin before fleeing to the U.K. in 2017.

The victims argued that English law should apply to their claims because it might allow them to establish property rights over the seized cryptocurrency. However, High Court judge Mark Turner ruled on Monday that Chinese law must govern the claims because the alleged fraud occurred in China.

“The relevant damage occurred in China. The applicants parted with their money in China. The alleged fraudulent representations were made in China,” Turner said. He added that the agreements arising from the alleged fraud were made in China and that the immediate financial losses were experienced there as well.

The judgment does not establish who will ultimately receive the bitcoin. However, it restricts the legal avenues available to victims seeking compensation and strengthens the possibility that the U.K. Treasury will keep the confiscated assets.

The victims’ lawyers are challenging the ruling, according to the Financial Times. The Crown Prosecution Service (CPS) said a further court hearing would assess whether any victims can demonstrate a legal interest in the bitcoin.

Elsewhere, the United States has incorporated cryptocurrency seized through law enforcement into its national reserve framework. In March 2025, the country established a strategic bitcoin reserve containing BTC and other digital assets confiscated in enforcement actions. No tokens have been purchased using taxpayer funds. Data from Arkham Intelligence shows that wallets associated with the U.S. government hold approximately $25.8 billion in cryptocurrency.