David Edwards
The United Kingdom is considering liquidating more than £5 billion ($6.7 billion) worth of seized Bitcoin in a move aimed at narrowing the country’s fiscal deficit. According to recent reports, the Home Office and Chancellor of the Exchequer Rachel Reeves are coordinating with law enforcement agencies to facilitate the sale and create a custodial system for handling the digital assets.
This prospective liquidation, primarily involving over 61,000 BTC seized from a 2018 Chinese Ponzi scheme, could inject approximately $7.1 billion into UK government coffers—should current Bitcoin prices hold. However, the initiative is already mired in legal complexities and diplomatic sensitivities.
Legal Status in Question
The cryptocurrency was originally confiscated when Jian Wen, a UK-based hospitality worker, attempted to launder funds from the Tianjin Lantian Gerui Electronic Technology scheme by purchasing a London mansion. Wen was later convicted on three counts of money laundering and sentenced to over six years in prison in 2024.
Despite the conviction, ownership of the Bitcoin remains contested. Chinese authorities and victims of the Ponzi operation have requested its return, and diplomatic discussions are reportedly ongoing. Susie Violet Ward, CEO of Bitcoin Policy UK, denounced the proposed sale as premature, noting that “no sale can happen while that legal process is unresolved.”
Policy Debate Intensifies
The UK’s Crown Prosecution Service has already petitioned the High Court to retain the seized Bitcoin under proceeds of crime laws, potentially paving the way for distribution among law enforcement agencies and the Treasury. Under UK law, such assets can be sold to satisfy court-ordered confiscations and compensate victims where applicable.
Freddie New, head of policy at Bitcoin Policy UK, emphasized that while victims originally lost yuan—not Bitcoin—diplomatic efforts may push for BTC restitution instead. He also indicated that any remaining proceeds post-compensation and legal costs would be split among law enforcement entities and the Treasury.
Infrastructure and Strategic Implications
In May 2025, the UK government launched a £40 million ($53.7 million) tender to develop a “crypto storage and realisation framework”—a system to manage and eventually liquidate seized digital assets. However, the plan was shelved earlier this month due to a lack of qualified bids.
Crypto advocates argue that selling the holdings would signal short-termism. Jordan Walker, founder of the Bitcoin Collective, called the sale “economically shortsighted,” urging the government to retain the asset as a strategic reserve. Bitcoin Policy UK similarly urged legislative reforms to allow the Treasury more discretion in preserving seized Bitcoin for national interest.
