The High Court decided that fraud victims' ownership claims to about 61,000 bitcoin must be judged under Chinese law. Who actually owns the coins is still undecided, but the ruling could limit how much of their rise in value victims can claim.
A government-held stash of bitcoin worth about $5 billion moved a step closer to an answer on who gets it. The answer is not yet the victims' preferred one.
In a judgment dated Oct. 12, Mr. Justice Turner of the High Court in London ruled that Chinese law, not English law, governs the claims of applicants who say they have proprietary interests in about 61,000 bitcoin seized in the case brought by the Director of Public Prosecutions against Zhimin Qian and another defendant.
"Whether analysed through the prism of Rome I, Rome II, or the common law rules applicable to proprietary questions, the governing law of the issues upon which the Applicants rely is Chinese law," the judge wrote.
At about $83,660 a coin early Tuesday, the holding is worth roughly $5.1 billion.
What Was Decided
The ruling answers which country's law applies, not who wins. The judge rejected two of the applicants' arguments for applying English law and said "any issues concerning the content, effect or proof of that law are matters for a later stage." It was not disputed that bitcoin counts as property under English law.
The prosecutors argued that Chinese law should apply, and the court-appointed litigation receivers supported that position.
The applicants are numerous. A court order in March listed the lead applicant "and 2593 other applicants."
Why The Law Matters
The coins are worth many times what victims originally paid into the scheme. Lawyers and commentators following the case have said that a Chinese-law framework may limit victims to recovering their original losses with interest, rather than a share of the coins' appreciation. If that reading holds, much of the value could remain with the U.K. state. Prosecutors proposed a compensation scheme in October 2025 that, according to reports at the time, could leave any surplus with the Treasury.
Duan & Duan, which represents one group of applicants, said: "We are considering the judgment carefully with our clients and will continue to pursue their claims."
The Supply Question
Bitcoin investors watch government holdings because the state can become a seller. About 61,000 coins is roughly 0.3% of the bitcoin in circulation. It is also worth about 78 times the $65 million that U.S. spot bitcoin funds lost to redemptions on Monday.
Nothing in the ruling says what the U.K. would do with any coins it keeps. Selling, holding or transferring them would each require separate decisions, and appeals are possible.
Market Implications
One reading is that the U.K. is now more likely to end up with a large surplus of bitcoin, which would make it a potential seller of a significant block at some point.
A second reading is that the ruling is procedural. The content of Chinese law, each applicant's entitlement and any appeal all remain open, and the timing of any disposal could stretch for years.
What To Watch
The next hearing on the content of Chinese law, any appeal by the applicants and any statement from the U.K. Treasury on how it would treat surplus assets will determine whether the coins ever reach the market.