U.K. and China Compete for Dominance Over $7 Billion in Bitcoin: Potential Sell-Off Ahead?

A woman who was instrumental in a cryptocurrency fraud that deceived 128,000 investors in China has admitted to money laundering — yet the situation is still ongoing.

Yadi Zhang, also referred to as Zhimin Qian, orchestrated deceptive investment schemes from 2014 to 2017, with the majority of the illicit profits stored in Bitcoin. Victims were lured with promises of returns as high as 300%, which were clearly unrealistic.

Upon her arrival in the U.K. using a fake passport, she indulged in a luxurious lifestyle — leasing a $6.7 million mansion in a wealthy area of London.

Her residence was searched in October 2018 — and it took specialists two and a half years to discover an astonishing 61,000 BTC in wallets located on multiple laptops.

While the seized amount was valued at approximately $1.8 billion at that time, its worth has since surged to $7 billion — validating the Metropolitan Police’s assertion that this was among the largest cryptocurrency confiscations globally.

Just before Zhang was set to be interrogated by authorities in 2020, she vanished without a trace. It was not until April 2024 that she was apprehended in the Northern England town of York.

Although her guilty plea eliminates the need for a trial, a more significant issue remains: the fate of the confiscated Bitcoin.

Image: Arkham Intelligence

What Happens Next?

In summary, there is an ongoing dispute between the U.K. and China regarding who should take possession of this Bitcoin.

The defrauded individuals have urged Beijing to initiate discussions to secure their restitution.

However, it is evident that the British government has alternative plans. Reports indicate that it aims to liquidate this BTC for cash, using the billions to address a financial shortfall in the country.

This action could significantly alleviate the financial challenges facing Chancellor Rachel Reeves — who may need to reconsider previous commitments not to increase taxes — but it could also be an unpopular choice for various reasons.

In addition to the potential backlash from the Chinese government, the sell-off could exert downward pressure on BTC prices and possibly disrupt the ongoing bull market. The liquidation would also likely face strong opposition from Reform UK, the right-wing political party currently leading in opinion polls. Its leader, Nigel Farage, has advocated for Britain to establish a strategic Bitcoin reserve funded by confiscated coins, following the example set by Donald Trump.

Let’s get the British economy into the 21st century.
Read Reform UK’s Cryptoassets and Digital Finance Bill.
https://t.co/5QytUV1p1V pic.twitter.com/pfqdAxhHPe

— Nigel Farage MP (@Nigel_Farage) May 30, 2025

Moreover, Reeves may face accusations of being shortsighted — particularly if Bitcoin’s value continues to appreciate. Last year, Germany sold 50,000 BTC for $2.8 billion — cryptocurrency that was confiscated from a movie piracy operation. Fast forward to now, and that amount would be valued at $5.8 billion, indicating that taxpayers missed out on substantial sums of money.

The future of this BTC remains uncertain, and currently, the High Court in London is deliberating on the next steps. While British officials assert that the proceeds should benefit the Treasury, the Chinese government is also funding a legal team to advocate for the victims of Zhang’s schemes — which include entrepreneurs, bankers, and judges. In a somewhat unusual remark following the guilty plea, her attorney Roger Sahota stated:

“By pleading guilty, Ms Zhang hopes to bring some comfort to investors who have waited since 2017 for compensation, and to reassure them that the significant rise in cryptocurrency values means there are more than sufficient funds available to repay their losses.”

She has now been placed in custody as she awaits sentencing at a future date. Jian Wen, an accomplice who assisted her in laundering the proceeds, was sentenced to nearly seven years in prison in 2024.

Yuhua Yang from Thornhill Legal has remarked that the High Court dispute “will test the boundaries of cross-border financial crime enforcement, crypto asset recovery, and the judicial cooperation between China and the West in the digital currency era.”

Given that the victims were located in Asia while the BTC was confiscated in Europe, this is far from a straightforward case. The outcome of this legal battle will undoubtedly have international implications.

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