Victims of a large-scale cryptocurrency scam are set to receive restitution from the UK following the arrest of the perpetrators, who the London Metropolitan Police seized thousands of Bitcoins from in connection with a massive investment scam.
UK prosecutors are preparing to confiscate Bitcoin worth about $6.8B connected to one of the largest cryptocurrency fraud cases ever uncovered.
Prosecutors revealed during a court hearing in London on Wednesday that the funds are tied to a fraudulent investment scheme that swindled about 128,000 investors across China. Authorities plan to create a victim compensation program to return funds to those affected.
Chinese victims are set to be repaid by the UK
The $6.8 haul is from an investigation by the London Metropolitan Police, which uncovered 61,000 Bitcoins in 2018 during a money laundering probe involving two Chinese women.
The women were involved in a 2017 fraud case that was first detected by Chinese authorities when investors began reporting losses linked to Tianjin Lantian’s promises of high-yield returns. The scheme eventually fell apart and exposed a vast network of false investment products and fake profits used to attract new participants. The structure was similar to a Ponzi-style scam.
UK prosecutors stated that the company lured investors with promises of high returns and when it collapsed, it resulted in losses of more than 40 billion yuan. Fourteen Chinese nationals have already been convicted in China in connection with the scheme.
One of the largest UK crypto seizures
Yadi Zhang, also known as Zhimin Qian, played a key role in laundering the stolen cryptocurrency. Zhang pleaded guilty to money-laundering charges last month after years of investigation. Her accomplice, another Chinese woman, was convicted of fraud by a UK jury last year.
Prosecutors revealed at the last hearing that Zhang had hidden additional cryptocurrency from investigators. The court filings show that Zhang told police in April 2024 that she had stored the passwords for two crypto wallets inside a pocket sewn into the pair of jogging bottoms she was wearing at the time of her arrest. Due to her confession, the police were able to recover another £67.3M worth of Bitcoin.
“Some investors have suffered huge personal loss in the form of lives, marriages, fracturing families and businesses,” William Glover, a representative of a group of affected investors, stated.
Glover added that the fraud had destroyed livelihoods and caused years of hardship for ordinary people who had invested their savings in what they believed were legitimate opportunities.
Discussions are already being held to determine how the funds will be distributed. The court will have to decide on the process for verifying claims and determining which victims qualify for compensation.
A lawyer representing another group of investors, Jackson Ng, stressed that the most important thing considering the amount involved in the case is to compensate the victims.
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