Yadi Zhang’s $7B Bitcoin Seizure Sparks Legal Battle Between U.K. and China

A total of $7 billion in Bitcoin is now at the center of a legal confrontation between the U.K. and China. The digital assets, connected to one of the largest cryptocurrency frauds in recent years, were confiscated following a lengthy investigation, yet questions over who owns them are still unresolved.

China’s Largest Bitcoin Fraud Case

The case centers on Yadi Zhang, who has pleaded guilty to money laundering. Between 2014 and 2017, Zhang ran a series of fraudulent wealth schemes, promising Chinese investors returns of up to 300%. More than 128,000 people were defrauded, and most of the funds were converted into Bitcoin. Her operations combined technical skill with traditional financial tricks, making the scheme complex and difficult to trace.

After moving to the U.K. under a false identity, Zhang lived extravagantly. She rented a $6.7 million mansion in London and maintained a lifestyle far beyond her apparent means. Her home was searched in October 2018, but investigators initially found only a small portion of her assets. Specialists spent two and a half years uncovering 61,000 BTC across multiple devices. At the time, the coins were worth $1.8 billion, a value that has since risen to $7 billion as Bitcoin’s price increased.

The financial damage to victims has been severe, with many waiting years for compensation. Zhang’s guilty plea in 2025 provides some closure, but her sentencing is still pending. Authorities continue to investigate accomplices, including Jian Wen, who was sentenced in 2024 for helping launder the illicit funds.

Who Owns the $7B Bitcoin?

The ownership of seized Bitcoin has become an international dispute. China wants the funds returned to victims so they can recover losses from nearly ten years ago. The U.K. government sees the coins as a way to raise revenue and reduce budget deficits. Reports say Treasury officials may sell the Bitcoin, which could generate billions but might also affect the market.

Selling such a large amount carries risks. Analysts warn that a sudden sale could lower prices temporarily. Groups like Reform UK may also oppose a quick sale, preferring to keep some Bitcoin as a reserve. Germany’s sale of 50,000 BTC last year shows that selling too early can lead to missed profits.

Negotiations between China and the U.K. are sensitive. Legal teams for Zhang’s victims are preparing for a long High Court battle. The case could set an important precedent for handling digital assets across borders.

Broader Implications Of The Case

This legal case goes beyond Zhang’s personal crimes. It raises questions about how governments should handle seized cryptocurrencies, especially when more than one country is involved. Traditional asset seizures usually follow clear international rules, but digital currencies are more complicated. Blockchain makes transactions traceable, but ownership disputes across borders remain unclear.

The outcome could show how authorities handle large crypto seizures. Seized coins might be sold, held in national reserves, or returned to victims. Each choice affects the market, investor confidence, and legal precedent. Experts like Yuhua Yang from Thornhill Legal say the case could change how China and Western nations cooperate on crypto crimes. The case shows that cryptocurrency is not just money but also a geopolitical asset that can influence policy and the global economy.

Next Steps in the Case

The next stage of the case will focus on the High Court’s decision about the seized Bitcoin. Lawyers for both the U.K. Treasury and the Chinese victims are preparing arguments over who has the rightful claim to the $7 billion.

Courts and authorities will need to consider financial, legal, and political factors. The decision could set a precedent for how large cryptocurrency seizures are handled across borders, affecting both government actions and investor expectations.