UK Reportedly Preparing to Sell $7 Billion in Seized Bitcoin Amid Legal Dispute
The United Kingdom is reportedly preparing to sell a massive trove of seized Bitcoin valued at over $6.7 billion to help reduce a growing budget deficit. However, the move is drawing criticism and legal complications as victims of a Chinese Ponzi scheme lay claim to a significant portion of the assets.
Treasury, Law Enforcement Coordinate on Bitcoin Sale
According to a report from The Telegraph, UK Treasury officials, including Chancellor Rachel Reeves, are working with the Home Office and law enforcement agencies to create a framework for storing and selling seized cryptocurrency. The initiative is reportedly part of a broader plan to tap into the growing value of Bitcoin, which recently surpassed $119,000 per token.
Law enforcement traditionally handles asset seizures and liquidations in the UK, but the Treasury’s involvement appears to be driven by the asset’s dramatic appreciation during the ongoing crypto bull market.
The government has not officially disclosed the full size of its Bitcoin holdings. However, it is believed to possess at least 61,000 BTC, primarily from a 2018 seizure linked to a Chinese Ponzi scheme — an amount now worth approximately $7.1 billion.
Legal Claims from Chinese Ponzi Scheme Victims
The Bitcoin in question was originally seized when hospitality worker Jian Wen was caught attempting to launder proceeds from a $6 billion investment scheme operated by Tianjin Lantian Gerui Electronic Technology. Wen was found guilty of money laundering and sentenced in May 2024 to six years and eight months in prison.
However, victims of the Ponzi scheme — who reportedly lost funds in Chinese yuan — have been calling for the return of the seized Bitcoin since 2024. The Chinese Foreign Affairs Ministry has been urged to negotiate with the UK for the repatriation of the funds.
Susie Violet Ward, CEO of Bitcoin Policy UK, criticized the recent media coverage as “sensationalism over substance,” emphasizing that no sale can occur until the legal ownership of the Bitcoin is resolved.
Court Case and Asset Confiscation Framework
The UK’s Crown Prosecution Service (CPS) is currently seeking a High Court ruling to retain the seized Bitcoin under proceeds of crime laws. If granted, the CPS could liquidate the assets and divide the funds between law enforcement agencies, victims (if applicable), and the Treasury.
Freddie New, head of policy at Bitcoin Policy UK, explained that under existing laws, seized assets can be sold to satisfy confiscation orders and restitution. However, he pointed out a legal wrinkle:
“Victims here lost yuan, NOT Bitcoin. Diplomatic efforts may be underway to request the Bitcoin instead of the original fiat currency.”
No new info, no depth, just sensationalism over substance.
The Telegraph just dropped another lazy, clickbait Bitcoin article.
It tries to link the UK’s budget deficit to government crypto procurement and floats the idea of selling 61,250 bitcoin right in the middle of a bull… pic.twitter.com/lQ8NIHGbbw
— Decentra Suze (@DecentraSuze) July 20, 2025
New added that once legal and administrative costs are covered, any remaining funds would likely be distributed among government agencies involved in the asset recovery.
Political Debate: Sell or Stockpile Bitcoin?
Amid the budget deficit concerns, some voices are urging the UK to retain the seized Bitcoin instead of selling. In July 2024, Bitcoin Policy UK submitted a proposal to the government recommending legal reform to allow the state to hold Bitcoin as a strategic asset. The proposal was reportedly ignored.
Jordan Walker, founder of the Bitcoin Collective, also issued an open letter urging the government not to liquidate its Bitcoin reserves:
“Selling these holdings to address a short-term budget deficit would send a concerning signal… and could have long-term consequences for the UK’s economic positioning.”
Crypto Storage Contracts Still Unresolved
The debate comes just weeks after the UK government canceled a £40 million ($53.7 million) tender for a crypto storage and liquidation framework. The system was intended to enable police to securely store and manage seized digital assets, but it was scrapped due to a lack of suitable applicants.
As of now, the fate of the UK’s seized Bitcoin — and the legal battle surrounding it — remains uncertain. But the growing scale of the holdings, along with the increasing value of crypto markets, ensures that the issue will remain in sharp focus in the months ahead.
