Qian Zhimin's "Dirty" Bitcoin: A Long Journey of Cross-Border Asset Recovery

The Lantian Gerui fraud case has entered a decisive stage — not just a criminal sentence of (11 years and 8 months), but a legal battle to recover 61,000 bitcoins currently frozen in the UK. With over 400 Chinese victims losing billions of yuan, the question is no longer “who is responsible” but “who will get the money back.”

What is “dirty money” that needs to be recovered?

On November 11, 2025, UK High Court Judge Sally-Anne Hales not only sentenced Qian Zhimin but also emphasized an important point: victims have not only lost money, they have lost their future. “Some have lost their homes, their health has been damaged, marriages have broken apart,” the court noted.

For teacher Zheng Zhengge, “total loss, family breakup” is not just words. In 2016, lured by the promise of “cooperation with the government” in the Lantian Gerui project, he borrowed credit, borrowed wages to invest over 1 million yuan. About 8 years later, he still owes 100,000 yuan, his salary card is frozen, while his children are waiting for university tuition.

Since June 2014, Qian Zhimin directed the “nominee” to open accounts on cryptocurrency trading platforms and systematized the conversion of investor funds into digital assets. The UK verdict revealed: when arriving in the UK in September 2017, Qian Zhimin held about 70,000 bitcoins. London police later froze 61,000 bitcoins — but that’s only what was visible.

According to court documents, Qian Zhimin purchased a total of 194,951 bitcoins, three times more than the frozen amount. Where are the remaining over 120,000 bitcoins? Qian Zhimin claimed he “lost the password” to the wallet containing 20,000 bitcoins — this “lost” portion alone is currently worth about 12.5 billion yuan.

The legal battle “one country, two systems”

Although extradition was not possible, UK police acknowledged the criminal facts provided by China — a major breakthrough in legal cooperation. But the next step is the real one: who will share the recovered funds?

According to UK law (POCA - Proceeds of Crime Act 2002), when assets are confiscated, the UK government shares with the requesting country, usually at a 50% rate. But in cases of economic fraud like Lantian Gerui, there is no consensus — everything depends on judicial procedures, chain of evidence, and diplomatic negotiations.

“The hardest point is that the UK will determine ownership of the assets first, then consider returning them to China.” This means: if the UK claims “a part of this is ours,” China will have no chance to recover it. London police even clearly expressed hope that part of the assets “flow back to London and Londoners” — because they have spent seven years investigating this case.

The UK’s asset recovery incentive mechanism (ARIS) stipulates a 50:50 split between the central government and law enforcement agencies, to encourage active pursuit of criminals. “In the face of enormous benefits, any organization can be a ‘rational economic actor’,” said expert Yan Lixin from Fudan University.

Can victims claim compensation based on increased value?

Currently, over 1,000 Chinese investors are trying to claim rights through civil procedures. Many are demanding “strongly”: not only the principal but also the appreciation of bitcoin over seven years.

At the time of freezing, these 61,000 bitcoins were worth about 305 million pounds. Today, they exceed 5 billion pounds — nearly a 1,600% return. Do victims have the right to claim this “profit”?

According to anti-money laundering “traceability” principles: if the stolen money was used to buy lottery tickets, victims can claim the entire prize. Similarly, if stolen funds have been converted into bitcoin, victims can claim based on the current value.

But there are other opinions: the increase in value is a result of market appreciation, not legitimate investment profit. Allowing victims to claim based on current prices could lead to the “success is high profit, failure is victim” scenario — a morally misleading incentive.

Referring to the domestic PlusToken case, China considers the entire value of encrypted assets, including appreciation, as illegal gains. Some experts argue that the excess appreciation beyond the principal should be regarded as “public surplus value,” and China should claim this huge difference into the national treasury.

The difficult problem: tracing cross-system money flows

However, the more significant challenge is technical. To prove that the frozen bitcoins originate from the Lantian Gerui fraud, investors must accurately trace the flow of funds from the original yuan capital to the current 61,000 bitcoins.

This is an “almost impossible task.” Why? Because the money passes through three separate systems:

First: Banking system and cash exchange in yuan.

Second: OTC (off-exchange) coin trading, relying on networks and WeChat groups — with no clear records.

Third: On-chain funds are muddled by cold wallets, multi-layer transfers, and coin mixers.

From 2014 to 2017 was the “perfect storm” for money laundering: off-exchange coin exchanges, concentrated purchases, high mixing, and coin mixers. When funds enter the “big pool,” they lose personal identification. On-chain analysis can only determine that “the water in the pool is dirty,” not “whose water is this.”

“A lot of the money that reaches the market development staff or enters the big pool is already in a giant black box; from a personal perspective, it’s impossible to know which money was exchanged for which coin,” said an analysis expert.

Adding to the complexity, in the Lantian Gerui case, many victims participated in round-trip investments: principal, profits, and reinvestments are mixed, some repaid cash, others received “preferential coins” or goods. Books and actual losses do not match.

“Currently, whether in China or the UK, there is a lack of professional capacity to reconstruct the entire money flow reliably,” said a lawyer deeply involved in the case.

Bright spots from international precedents

Fortunately, there are precedents. In 2015, the case of Li Huabo, head of the economic construction department of Poyang County, Jiangxi, pointed to a path. Although China and Singapore have not signed a bilateral mutual legal assistance treaty, the two sides cooperated: Singapore’s High Court executed the Chinese court’s confiscation order and returned the full 20.44 million yuan to China.

This was the first time China used illegal asset confiscation procedures to recover illicit assets from overseas corruption — a model of full restitution that can be applied.

The road ahead

Experts emphasize that China should stress the principle of “victim priority” in negotiations: only after fully compensating victims should the remaining share be divided between China and the UK. The Chinese government could accept the UK deducting “reasonable enforcement costs,” but should avoid defaulting to a 50% or lower recovery rate.

Some lawyers suggest that the Chinese government or designated asset management units should represent all victims and file civil lawsuits in UK courts. “This is not only a legal technical issue but also a matter of social governance. The appearance of the government will maximize the reassurance of domestic victims and demonstrate national will in international courts.”

This case is not just about asset recovery; it’s an opportunity. It pushes China from “focusing only on risks and banning cryptocurrencies” to “risk management, regulation, and international integration.” Only then can China have a voice in future cross-border asset recovery negotiations.

(The names Zheng Zhengge, Ge Qiu in the article are pseudonyms)