The UK government is preparing to sell more than £5 billion (approximately $7 billion) worth of Bitcoin to address the deficit in its budget. According to The Telegraph, Rachel Reeves, who heads the Home Office and the Treasury, is working with law enforcement to prepare the technical and legal infrastructure to dispose of these massive crypto assets seized by the state.
However, this move could impact not only markets but also international relations and legal processes. A significant portion of the Bitcoin in question is linked to a China-based Ponzi scheme discovered in the UK in 2018.
The fate of the 61,000 BTC is uncertain
While the exact number of Bitcoin held by the UK is unknown, it is estimated that 61,000 BTC were seized as a result of the fraudulent activities of a Chinese company called Tianjin Lantian Gerui Electronic Technology, and that this amount, at its current market value, exceeds $7 billion. A woman named Jian Wen, arrested in 2018, was caught trying to buy a luxury mansion in the UK with proceeds from a Ponzi scheme. She was subsequently convicted in 2024 on three separate money laundering charges. British prosecutors are applying to the High Court to return these assets to the public, requesting that the seized Bitcoins be returned to the state.
Victims demand their return, government prepares for sale
However, the Chinese victims and the Chinese government have been making long-standing efforts to have these Bitcoins returned to them. In 2024, a petition submitted to the Chinese Ministry of Foreign Affairs requested diplomatic talks with the UK. While the victims claimed they lost yuan (Chinese currency), not Bitcoin, as a result of the scam, the UK's current possession of BTC presents a complex legal situation. Susie Violet Ward, CEO of Bitcoin Policy UK, a crypto policy group, shared the following on X (formerly Twitter): “The sale of these Bitcoins is not legally possible because there is still controversy. The news itself is sensational, but it is far from reality.”
Crypto NGOs React
Another comment on the matter came from Freddie New, head of policy at Bitcoin Policy UK. New stated that if a sale were to take place, it could only be carried out under "proceeds of crime law," that court decisions would be awaited first, and that compensation for the victims would be a priority. He also stated that they had previously written to the government requesting that these valuable crypto assets be held as strategic reserves rather than sold out, but these requests went unanswered.
Jordan Walker, founder of the crypto advocacy group Bitcoin Collective, wrote an open letter to the government, warning that this sale could have long-term negative impacts on the UK's economic standing. At the time of writing, Bitcoin is changing hands at $119,400, quite close to the $120,000 levels.
