Recovery Rate of Crypto Assets Seized by UK and US Law Enforcement Agencies ≈ 0

Автор｜jk

Since 2018, US and UK law enforcement agencies have seized over $40 billion worth of криптовалютаcurrency assets in more than ten major cases. However, in the vast majority of these cases, the victims have received nothing to date. The digital assets that should have been returned to the victims have quietly flowed into government treasuries, strategic reserve funds, and law enforcement agency operating budgets.

This article reviews several typical cases to reveal this invisible secondary plunder.

Has Anyone Wondered, After Seizure, Where Does the Money Go?

In traditional criminal justice, the purpose of confiscating proceeds of crime is to deprive criminals of their illicit gains and, where possible, compensate victims. However, when law enforcement targets shift to криптовалютаcurrency, this logic breaks down.

Current US regulations (the Code of Federal Regulations) explicitly cap the compensation available to victims at the “fair market value on the date the loss occurred.” This means: if a victim lost 10 BTC when the price of Bitcoin was $5,000, even if the government holds those exact coins now worth millions, the victim can only claim $50,000. The massive premium from the price increase legally belongs to the government.

UK law is similarly “unfair.” According to the Asset Recovery Incentivisation Scheme (ARIS), 50% of confiscated assets go to the police and prosecution agencies involved in the enforcement, and the other 50% goes to the Home Office. The separate victim compensation channel receives far less funding than the first two, and the application process is cumbersome with high barriers.

In March 2025, US President Trump signed an executive order establishing a “Strategic Bitcoin Reserve,” requiring the Treasury to retain rather than sell confiscated Bitcoin. This further strengthens the government’s incentive to retain assets, institutionally blocking potential paths for victim compensation.

Typical Cases: Where the Victims’ Money Flows

UK: The Qian Zhimin Case, The World’s Largest Single Cryptocurrency Seizure

This is the largest single cryptocurrency seizure operation globally to date. In October 2018, the London Metropolitan Police’s Economic Crime Command raided multiple properties, seizing approximately 61,000 Bitcoin. Valued at around £305 million at the time of the incident, it had risen to about £5.5 billion (approximately $7.2 billion) by the end of the trial.

The defendant, Jian Wen (dual Chinese-British nationality, 42), was the money laundering intermediary for this batch of Bitcoin. She was convicted in March 2024 and sentenced to 6 years and 8 months imprisonment. The mastermind behind the scenes, Qian Zhimin (Chinese citizen, 47), is the founder of the Chinese company “Lantian Gerui.” Between 2014 and 2017, the company lured over 128,000 elderly Chinese investors with promises of high returns, defrauding them of over $5.6 billion. She was arrested in April 2024, pleaded guilty in September 2025, and was sentenced to 11 years and 8 months imprisonment in November of the same year.

A past annual meeting held by Lantian Gerui Company

What about the victims? All 128,000 victims are Chinese citizens, many of them retired elderly. Many invested their life savings to purchase the company’s assets, holding onto dreams of getting rich, even as the liquidation and compensation phase began. Currently, both the UK and Chinese governments claim sovereignty over this batch of Bitcoin. Civil recovery proceedings are ongoing, but legal professionals admit that given the dual national sovereignty dispute, the likelihood of victims ultimately receiving compensation is very low. In China, information collection from victims has started, but how many will ultimately receive compensation, whether the compensation amount will be the equivalent value from back then or include Bitcoin’s appreciation, or even if the funds will entirely remain with UK law enforcement agencies, remains unknown.

Funds Flow: UK Treasury (expected). Actual Victim Compensation: Zero, but the case is not yet concluded.

US: The Silk Road Case, $3 Billion in “Ownerless Wealth”

Silk Road was the most notorious darknet drug marketplace in history. After its founder, Ross Ulbricht, was arrested in 2013, the massive Bitcoin accumulated by the platform was gradually seized.

In November 2021, IRS-CI seized 51,680 Bitcoin, worth over $3.36 billion, from a single-board computer hidden in a floor safe in a Georgia residence. Zhong (32, from Georgia) stole this batch of coins in 2012 by exploiting a system vulnerability, hid them for nearly a decade, and was sentenced to one year and one day in prison in April 2023.

Since Silk Road itself was an illegal platform, the court ruled that there were no “legitimate victims,” and both seized asset batches were directly forfeited to the government. In December 2024, a federal judge dismissed a claim from an investment company, clearing the way for the government’s asset disposal. According to the 2025 Strategic Bitcoin Reserve executive order, these assets may be permanently retained in the federal reserve.

Funds Flow: US Treasury Strategic Bitcoin Reserve. Actual Victim Compensation: Zero.

Prince Group / Huione / Chen Zhi Case, The $15 Billion Mystery

On October 14, 2025, the US Department of Justice (Eastern District) unsealed an indictment in New York federal court, charging Chen Zhi (also known as Vincent, 37, Cambodian nationality), founder and chairman of Cambodia’s Prince Holding Group, with conspiracy to commit wire fraud and conspiracy to commit money laundering. The charges allege he oversaw the operation of forced labor “pig butchering” scam bases, defrauding global victims of tens of billions of dollars.

Concurrent with the criminal charges, the DOJ filed a civil forfeiture lawsuit, targeting approximately 127,271 Bitcoin (worth about $15 billion). This Bitcoin is now in the custody of the US government, marking the largest seizure in US history. According to TRM Labs’ on-chain analysis, this Bitcoin had been largely dormant since December 2020 until signs of activity reappeared between June and July 2024, coinciding with the DOJ’s seizure action.

On the accompanying sanctions front, the US Treasury’s OFAC and the UK’s Foreign, Commonwealth & Development Office (FCDO) coordinated to sanction 146 targets linked to the Prince Group transnational criminal organization. FinCEN finalized a determination under Section 311 of the Patriot Act, formally cutting off Huione Group from the US financial system. FinCEN determined that Huione Group was a key money laundering hub for North Korean cyberattack hacker groups and Southeast Asian transnational criminal organizations, laundering over $4 billion in illicit proceeds between August 2021 and January 2025.

Details of funds laundered by Huione Group include: $37 million from North Korean cyber theft, $36 million from cryptocurrency investment scams, and $300 million from other online scams. According to the FBI’s Internet Crime Complaint Center 2024 report, cryptocurrency investment scam losses in the US alone reached $5.8 billion that year. In one confirmed case, a Brooklyn money laundering network transferred approximately $18 million in illicit proceeds from over 250 US victims to Prince Group accounts between May 2021 and August 2022. Following the exposure, South Korea and Singapore followed suit, announcing sanctions against Prince Group, with South Korea’s Ministry of Foreign Affairs calling it the “largest single sanctions action in history.” The dispute remains unresolved. A victim compensation plan has no timeline whatsoever.

Funds Flow: Civil forfeiture proceedings pending; Actual Victim Compensation: As of February 2026, still zero.

North Korea’s Lazarus Hacker Group, Recoveries Just the Tip of the Iceberg

North Korea’s state-sponsored hacker group, Lazarus Group (also known as APT38), has stolen over $5 billion in cryptocurrency since 2014, making it the world’s most active cryptocurrency crime syndicate. Major cases include: the $620 million theft from Ronin Network (Axie Infinity) in 2022; the $100 million theft from the Harmony Horizon cross-chain bridge in 2022; and the $1.5 billion theft from Bybit in February 2025, the largest single cryptocurrency exchange hack in history.

US authorities have filed civil forfeiture lawsuits for multiple asset batches, seizing approximately $50 million cumulatively since 2020, representing less than 1% of the total stolen amount. In June 2025, the DOJ recovered $7.74 million in crypto assets related to a case where North Korean IT outsourcing workers impersonated US freelancers.

The vast majority of stolen assets are laundered through mixers and vanish on-chain. The tiny fraction recovered flows into government forfeiture accounts, with no public compensation distribution plan. For Bybit’s $15 billion loss, the funding gap for affected users was primarily filled by the exchange’s own funds, not from law enforcement recoveries.

Funds Flow: US Government forfeiture accounts. Actual Victim Compensation: Minimal to zero.

LockBit Ransomware Case, $500 Million in Ransom, None Returned

In February 2024, “Operation Cronos,” led by the UK’s National Crime Agency (NCA) and involving law enforcement from over 10 countries including the US, Europe, and Australia, dismantled LockBit’s global infrastructure, seizing 34 servers and freezing over 200 cryptocurrency accounts. In May 2024, the DOJ charged Russian citizen Dmitry Khoroshev with 26 counts, alleging he received approximately $100 million in Bitcoin commissions as a primary developer for LockBit. Since 2020, LockBit has extorted over 2,500 victims in more than 120 countries, with known ransom payments exceeding $500 million, including over 1,800 victims within the US.

The enforcement action successfully distributed about 7,000 decryption keys, preventing further loss for some victims who had not yet paid the ransom. However, funds previously paid as ransom by institutions (hospitals, schools, government departments, etc.) were not recovered, and there is no dedicated compensation fund. Khoroshev remains at large in Russia, and OFAC has sanctioned him.

Funds Flow: Frozen accounts owned by the government, no distribution. Actual Victim Compensation: Decryption keys (but no monetary compensation).

BTC-e / Alexander Vinnik Case, The Dilemma of Recovery Proceedings

Russian citizen Alexander Vinnik was arrested in Greece in July 2017. The BTC-e exchange he operated processed over $9 billion in Bitcoin transactions, making it one of the world’s largest Bitcoin money laundering platforms at the time. The US Financial Crimes Enforcement Network (FinCEN) fined BTC-e $110 million. After serving a 5-year sentence in France, Vinnik was extradited to the US, pleaded guilty in May 2024, but was released in February 2025—before formal sentencing—as part of a prisoner swap for an American journalist detained in Russia, terminating the criminal proceedings.

On June 30, 2025, the DOJ filed a civil forfeiture lawsuit for the remaining BTC-e virtual currency, opening a 60-day claims window (until September 2, 2025). Users and other victims can file claims, but the review process is lengthy and requires submission of detailed transaction records and KYC information. Given the complexity of the assets involved and the large number of claimants, the final distribution outcome is highly uncertain.

Funds Flow: Pending. Actual Victim Compensation: Claims process ongoing.

Twitter Hack Case, Victims of Small-Scale Scams Never Compensated

On July 15, 2020, 17-year-old Florida teenager Graham Ivan Clark used social engineering to hack Twitter’s internal tools, hijacking around 130 verified accounts including those of Barack Obama, Joe Biden, Elon Musk, and Bill Gates. He posted “double your Bitcoin” scam tweets, tricking users into sending approximately $117,000 worth of Bitcoin within hours. Clark was sentenced to 3 years in prison in March 2021. Law enforcement recovered over $3 million worth of Bitcoin from Clark (including proceeds from prior SIM-swapping fraud).

The victims of this Twitter scam (ordinary users tricked into sending Bitcoin) never received any compensation. The recovered cryptocurrency was forfeited to the government through standard procedures, with no dedicated compensation fund or claims channel for the Twitter scam victims.

Funds Flow: US Government forfeiture accounts. Actual Victim Compensation: Zero.

Why Are Victims Always Bullied Repeatedly?

The above cases are not accidental but the inevitable result of how two systems operate.

In the US, the law explicitly states that victims can only recover the “fair market value on the date the loss occurred,” not the actual value at the time of seizure. This means if a victim lost 1 BTC in 2019 when the price was $8,000, even if the government holds that Bitcoin today worth $100,000, the victim can only claim $8,000. The remaining $92,000 difference is legally retained by the government.

In the UK, the Asset Recovery Incentivisation Scheme (ARIS) splits confiscated assets three ways: half goes to the police and prosecution agencies involved in enforcement, half goes to the Home Office, and the separately established victim compensation channel receives far less funding than the enforcement agencies’ share. In the 2024-2025 fiscal year, UK enforcement agencies received approximately £160.3 million through ARIS, while victim compensation was only about £47.2 million, a ratio of roughly 3.4:1.

The US’s 2025 Strategic Bitcoin Reserve further solidified this pattern. The executive order explicitly instructs the Treasury to retain rather than auction confiscated Bitcoin, positioning the federal government as one of the world’s largest Bitcoin holders. This reserve logic creates a fundamental conflict of interest with victim compensation.

Simultaneously, victims face procedural barriers: compensation claims must be filed within 30 days of notification with detailed claim materials, including wallet addresses, transaction IDs, and KYC records. In cross-border cases, victims scattered across multiple countries are often completely unaware of US administrative procedures, permanently losing their right to claim after missing the window.

In the Qian Zhimin case, 128,000 elderly Chinese victims watched their life savings investment become a legal dispute between the London Metropolitan Police and the UK Treasury. In the Silk Road seizure case, billions of dollars in Bitcoin were directly locked into the US strategic reserve due to the legal determination of “no legitimate victims.” In the Huione case, tens of thousands of global “pig butchering” victims, despite being identified, see no compensation timeline in the $15 billion seizure action.

If bringing criminals to justice is about upholding justice, who is paying for this “legal secondary plunder”?

Эта статья взята из интернета: Recovery Rate of Crypto Assets Seized by UK and US Law Enforcement Agencies ≈ 0

Related: Is it Worth Participating in the TGE of Robot Sector Leader OpenMind with a $400 Million Valuation?

Author | Asher (@Asher_ 0210) On January 23, Fabric Foundation, the foundation account for the leading robotics project OpenMind, posted on X, announcing that its native token ROBO will soon conduct a token sale on the Kaito platform. Below, Odaily will guide you through understanding the leading robotics project OpenMind, its relationship with Fabric Foundation, and the details of the token sale. OpenMind: Building a Universal Operating System and Decentralized Collaboration Network for Intelligent Machines Founded by Stanford University professor Jan Liphardt, OpenMind is dedicated to building a universal operating system and a decentralized collaboration network for intelligent machines. This enables robots from different manufacturers and of various forms to securely trust each other, share information, and collaborate globally. Notably, OpenMind was successfully selected as one of the Top 100…