High Court selects Chinese law for claims to seized bitcoin

The High Court in London has ruled that Chinese law will govern the underlying proprietary rights asserted by fraud victims seeking a share of bitcoin recovered in the Zhimin Qian case. The October 12 decision determines the law to apply to those claims, while ownership questions remain for a later stage.

Mr Justice Turner’s published judgment, in Director of Public Prosecutions v Zhimin Qian & Anor, addresses claims made within the existing civil recovery proceedings. The recovered property includes more than 61,000 bitcoin, according to the agreed facts set out in the judgment.

The applicants rely on section 281 of the Proceeds of Crime Act 2002, seeking declarations that property recovered by the authorities belongs to them. The judge explained that a claim for repayment from the perpetrators, as a creditor, is insufficient by itself to establish the proprietary interest required for that route.

The ruling used an agreed statement of assumed facts. It placed the investment schemes, victims’ payments and conversion of proceeds into bitcoin in China, before Qian left the country in 2017. The judge concluded that Chinese law governs the rights underlying the applicants’ claims.

The court had not yet received evidence about the content of Chinese law or the precise evidential basis of each individual claim. Those questions will be considered later. The judgment therefore does not settle which investors own recovered assets or determine a distribution of the bitcoin.

James Hunt reported for The Block on October 13 that Fieldfisher, the lead firm representing individual claimants, told the Financial Times it was pursuing an appeal. That report describes an intended challenge; it does not establish that an appeal has been allowed or decided.

Law firm Duan & Duan, which represents some investors, also described the decision as a preliminary choice-of-law ruling. For the ongoing recovery proceedings, the next substantive questions concern the applicants’ asserted rights under Chinese law and their claims through the English statutory process.

Sources

Director of Public Prosecutions v Zhimin Qian & Anor · Chinese law governs claims in Qian bitcoin case · Duan & Duan: preliminary choice-of-law decision