Will the UK sell 61,000 BTC, or pay victims the gains?
The United Kingdom is holding 61,000 Bitcoin worth roughly $7.2 billion after pleading guilty to fraud, and a January High Court test will determine who will capture the upside from assets seized in 2018.
Zhimin Qian, also known as Yadi Zhang, pleaded guilty on September 29 at Southwark Crown Court to offenses tied to a multi-year investment fraud that affected more than 100,000 people in China, and Metropolitan Police previously said investigators recovered 61,000 BTC from a property in Hampstead in 2018.
According to the Financial Times, prosecutors are preparing a High Court route that would resolve whether victims are compensated at original loss values, around £640 million, or at today’s valuation, around £5 billion at recent market levels, with Treasury officials unable to count any proceeds in the November Budget.
That framing defines the market and legal questions, since a compensation order based on principal returns a smaller sum to victims and leaves a surplus for the state after confiscation, while a mark-to-market award directs the current value to victims and materially reduces any fiscal windfall.
The legal mechanics matter.
Under the Proceeds of Crime Act 2002, courts impose confiscation to remove criminal benefit, then enforce against available assets, which can include digital assets held in state custody. Compensation orders under the Sentencing Act 2020 focus on loss to victims and take priority over fines and confiscation where the offender cannot satisfy everything.
Appeals suspend payouts under the statute, which affects timing even when liquid assets are ready to distribute. The Home Office also updated crypto seizure and realization powers in 2023 and 2024, authorizing police and receivers to hold, convert, and sell crypto under court supervision. In 2025, the central government moved to a national custody and realization framework to standardize operations.
Home Office publications say recovered money is handled through the Asset Recovery Incentivisation Scheme, which splits net receipts between central government and operational partners such as police and prosecutors.
The immediate forward issue is the valuation date and distribution path. If the High Court adopts original loss as the basis for compensation, victims receive around £640 million, and the remainder is confiscated.
Under ARIS, the net surplus would be shared between the Exchequer and asset recovery agencies, after fees and costs. If the court requires payment at current market value, the proceeds flow to victims, either in cash following realization or in kind by distributing BTC or its cash equivalent through a scheme, which would be more operationally complex given cross-border claim verification.
According to the Financial Times, officials have discussed the windfall implications but cannot recognize the proceeds for the November fiscal event, and any distribution would depend on orders, appeals, and the receiver’s timetable.
The market angle turns on cadence, not size in isolation.
Over the past week, U.S. spot Bitcoin ETFs recorded net inflows of over $1.6 billion, showing that the market routinely absorbs single-day demand or supply shocks within that band.
At a round price near $119,000, 61,000 BTC equates to about $7.2 billion, which maps to roughly 18 to 29 heavy ETF outflow days if sold as a lump, a framing that overstates impact because realized programs rarely settle in one session.
Liquidity studies from Kaiko describe a market where U.S. venues provide the deepest 1 percent order book depth in BTC pairs, and where execution risk falls when sales route through over-the-counter desks or are sliced across time and venues.
Therefore, the realization method is a second policy decision. Government sellers have relied on two playbooks compatible with UK powers.
One uses block trades through prime brokers and OTC market makers, limiting visible footprint on exchanges and smoothing price impact, a route the U.S. has used when moving government bitcoin to Coinbase Prime ahead of disposals.
Another uses auctions or controlled exchange programs, a model previously used by UK police forces for smaller lots through commercial auctioneers.
The new national custody and realization framework signals intent to industrialize the process for larger cases, with receivers, compliance controls, and reporting lines that sit within POCA and court oversight.
Victim and taxpayer outcomes also diverge on timing.
Compensation at original loss, followed by confiscation of the residual, points to a faster path to cash for victims after appeal periods, since a receiver can sell into a liquid market using an established framework.
Mark-to-market compensation raises a more complex set of distribution choices, since paying in BTC distributes market risk across many recipients, while paying in cash concentrates execution in the receiver.
Either way, the timing of the January hearing and any appeals governs when distributions start, and the state cannot book the value into near-term fiscal plans.
To ground the supply question in operational terms, a paced program that stays within recent ETF flow noise bands would look like the following, using $120,000 per BTC for illustration and ignoring slippage and fees:
| Sale cadence | Daily BTC | Daily notional | Days to clear 61,000 |
|---|---|---|---|
| Slow drip | 250 | $30,000,000 | 244 |
| Paced | 500 | $60,000,000 | 122 |
| Aggressive | 1,000 | $120,000,000 | 61 |
| Wave sales, weekly | 5,000 | $600,000,000 | 12 waves |
These magnitudes fall within capacity that ETFs and large OTC counterparties can absorb when spread across sessions. The comparison does not imply price path, it clarifies sizing relative to observable flow.
Comparative precedent shows the market can process state runoffs when method is disciplined. Germany sold large tranches of seized BTC in 2024 through transfers and exchange sales, and the United States has disposed of much of Silk Road’s holdings through periodic OTC-like routes after moving coins to a regulated prime broker. Though, the remaining BTC is now earmarked for its ‘strategic Bitcoin reserve.’
According to public disclosures and company statements, those processes were staged, with market focus on transfer dates, and prices recovered after initial volatility. The UK case is larger than past UK sales and sits in a different legal context, since the court must balance restitution and confiscation duties under POCA and the Sentencing Act before any realization timetable is finalized.
The unresolved legal point is whether victims are made whole at entry cost or made whole at current value. According to CPS guidance and Home Office policy summaries, compensation is intended to restore loss and takes priority over punitive orders, a design that favors original loss as the baseline, while confiscation removes criminal benefit and channels residual value to the state through ARIS once compensation is satisfied.
The Financial Times reports that officials are preparing arguments aligned with that structure, and that the hearing outcome will shape the distribution scheme, the fiscal footprint, and any sale plan that follows.
A decision that anchors compensation to original loss would leave a surplus that the state can realize under court supervision, subject to appeal bars, with receipts split between the Exchequer and operational partners.
A decision that uses current value would allocate most of the BTC’s value to victims, with realization mechanics depending on whether payouts come in cash or in kind.
The plea is entered, the coins are in custody, and the court calendar is set for the valuation test in January.
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