A British court has decided to apply Chinese law to a dispute over ownership of about 61,000 bitcoins seized in connection with a large investment fraud in China. Victims will have to prove property rights under Chinese law to recover the assets, a move expected to make the return process more complicated.

CoinPost reported on Oct. 14 that the UK High Court ruled on Oct. 12 that victims' rights to bitcoins previously held by Chinese fraudster Zhimin Qian (즈민 첸) should be assessed under Chinese law.

Qian raised about 40.2 billion yuan, or about 8.07 trillion won, through more than 128,000 investment contracts in China from 2014 to 2017. He used some of the funds to buy bitcoin. He later fled to Britain in 2017 and tried to launder money through real estate purchases and other means.

The London Metropolitan Police seized 4 devices that could access the bitcoins during searches in 2018. Qian admitted money laundering charges last year and was sentenced to 11 years and 8 months in prison.

The ruling came in civil asset recovery proceedings under way separately from the criminal trial. About 16,000 Chinese victims are currently participating in legal proceedings in Britain.

Victims claimed ownership of the seized assets under the UK Proceeds of Crime Act. Judge Mark Turner held that applying Chinese law was appropriate because key events, including the signing of investment contracts, the transfer of funds and the fraud, took place in China.

The final ownership of the seized bitcoins has not been determined. In future hearings, victims will have to prove proprietary rights to the bitcoins, not just a right to claim repayment of losses.

With the bitcoin price having risen sharply since the initial purchases, who is entitled to the increase in value has also emerged as an issue.

As the possibility has been raised that the British government could retain a substantial portion of the seized assets, Fieldfisher, the victims' legal representative, plans to appeal the decision.