Chinese police said they are working with fraud victims on restitution, after a scammer pleaded guilty in London’s Southwark Crown Court to defrauding them and converting their funds into Bitcoin.
Police in the northern city of Tianjin said they were “doing everything possible” to help more than 128,000 people who invested in fraudulent wealth schemes from 2014 to 2017 run by a syndicate that converted their cash into Bitcoin and property to hide its origin.
A government task force in the city last week called for victims to submit their claims to an online platform and to wait patiently for the return of funds, a process experts have said is likely to be complex and difficult.
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Businesswoman Qian Zhimin, alias Zhang Yadi, 47, who was wanted by Chinese authorities for masterminding the scheme, fled the country in 2017 after converting much of the investors’ cash into cryptocurrency.
She and her Malaysian assistant Seng Hok Ling, 47, pleaded guilty to money laundering charges at Southwark court in September and are due to be sentenced this month.
In 2018, police seized 61,000 Bitcoin from devices at a mansion in Hampstead, north London.
The government is involved in an ongoing battle with victims at the High Court in London, with the government seeking to retain much of the Bitcoin haul, now worth about $6.66 billion (£5bn), while victims argue the British state should not benefit.
Bitcoin is currently worth more than ten times its value in 2017.
The director of public prosecutions, Stephen Parkinson, last month at the High Court told victims about the possibility of establishing a compensation scheme, but details were not provided.
Counsel for the Crown Prosecution Service said at the time that in September Zhang had disclosed access codes and passwords for a ledger and two cryptocurrency wallets.
The court was also told that UK authorities had recently obtained access to additional cryptocurrency assets worth about £67m.
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UK Treasury officials have privately inquired whether the large Bitcoin stash could be used to help plug the country’s fiscal gap, but other officials have said the funds are likely to be subject to a protracted legal battle, and the Treasury cannot use it in their calculations, the Financial Times reported.
Last year a British-Chinese woman, Jian Wen, was jailed for more than six years for aiding Zhang to turn Bitcoin in to assets such as jewellery and properties.
Zhang’s diaries revealed that she hoped to buy Liberland, a small parcel of land in the Balkans that is promoted as a micronation by a Czech politician, in order to become its queen and be given diplomatic immunity, police said last year.
Last month US authorities seized more than $14bn in Bitcoin and charged Chinese-born Cambodian national Chen Zhi with operating a massive investment scam operation that targeted people around the world, including in the UK.
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