The High Court ruled on October 12 in Director of Public Prosecutions v Qian & Ors that Chinese law governs substantive property-rights claims over more than 61,000 bitcoin seized in the UK, as set out in the court judgment.

The preliminary decision moves the dispute to an assessment of Chinese law; ultimate ownership and distribution of the cryptocurrency remain undecided. The bitcoin is at the centre of a long-running case connected to Zhimin Qian.

High Court applies Chinese law to 61,000-bitcoin claims

The High Court decided that Chinese law applies to the substantive claims concerning the seized holdings; eventual ownership and distribution of the bitcoin remain before the court.

Approximately 61,000 bitcoin were seized by London’s Metropolitan Police in a case the Crown Prosecution Service has linked to an alleged Chinese investment fraud involving more than 128,000 victims between 2014 and 2017.

China-centred fraud drives the choice-of-law decision

The court found that the investment schemes, investor payments and bitcoin purchases were centred in China. On that basis, it selected Chinese law for the underlying substantive property-rights questions, according to Duan & Duan UK LLP’s account of the decision.

Claimants seeking rights in the seized bitcoin will therefore have to pursue those claims under the relevant Chinese-law framework rather than English substantive property law.

Chinese-law claims stage

The next phase is expected to address the content of Chinese law and how it applies to individual claims. That stage, rather than the October ruling itself, will determine how competing claims to the bitcoin are assessed.

CoinDesk reported that the decision improves the UK government’s prospects of retaining much of the holdings, which reports value at roughly £3.8 billion ($5 billion). It also reported that lawyers for victims are considering or pursuing an appeal, meaning the procedural ruling may yet face a challenge.

For now, the judgment establishes the legal framework for a dispute over one of the largest bitcoin seizures associated with a UK criminal case, while leaving the final destination of the assets unresolved.

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Source: Crypto Daily