Thousands of Chinese investors are facing critical uncertainty over getting their funds back from a bitcoin Ponzi scheme that happened years ago. As crypto regulations in the world tighten in the world this time, the investors are going to take a serious blow.
According to a report by Nikkie Asia, the protracted battle is taking place as attorneys attempt to establish a clear connection between their allegations and the 61,000 bitcoins that were confiscated by British police.
What happened?
The case revolves around Qian Zhimin, also called Zhang Yadi, a 47-year-old Chinese woman who allegedly defrauded investors through her firm, Tianjin Lantian Gerui Electronic Technology, and fled to the UK in 2017.
She allegedly raised 43 billion yuan ($6 billion) between 2014 and 2017 by offering high-yield investment products and then turning the proceeds into cryptocurrency assets.
In late September, Qian entered a guilty plea to two charges of cryptocurrency money laundering in a London court. Her associate, Wen Jian, was convicted earlier this year and sentenced to nearly seven years in prison for helping move the funds.
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During a 2018 search in Hampstead, the London Metropolitan Police subsequently confiscated 61,000 Bitcoin from Qian’s devices, which is currently valued at over $7.4 billion, making it the greatest cryptocurrency seizure in the history of the United Kingdom.
The UK government may keep a large portion of the Bitcoin that was confiscated, though, which has worried Chinese victims’ attorneys.
Investors struggle to get back their funds
Legal professionals caution that restitution is unpredictable because of the difficulty of tracking money across several accounts and currencies.
The distribution of the assets will be decided in a September 2024 civil recovery lawsuit brought under U.K. law. January 2026 is the planned date for the lawsuit.
Although Qian’s guilty plea “indirectly validates the fraud allegations in China,” Yang Yuhua of Thornhill Legal stated that it is doubtful that Bitcoin would regain its increased value.
Coordination and documentation are made more difficult by the fact that many of the victims, an estimated 130,000 people, are small investors who are not familiar with digital banking.
Ding claimed that because many victims “have limited education and experience with computers,” it has been challenging to communicate effectively. Qian said she left China to avoid a crackdown on cryptocurrency entrepreneurs, although she has previously rejected the claims.
What does this mean?
As crypto gets more and more successful every year, Ponzi schemes like these are also rising at an alarming rate. The thing that becomes even more difficult is not just to stop these kinds of cases, but to trace the funds back so the investors can get their money back.
As this case unfolds, it will be an example of how difficult crypto tracking in these kinds of crypto scams is and how it will be handled in the future when such cases float again.
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