After the British and American law enforcement agencies seized the encrypted assets, they returned to their original location

Original Odaily Daily@OdailyChinaI'm not sure

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Since 2018, United States and British law enforcement agencies have seized over $40 billion in encrypted monetary assets in over 10 major cases. However, in the vast majority of casesThe victim hasn't received anything yetI don't know. The digital property of the victims, which should have been returned, had gone quietly into the operating budgets of the Government treasury, the Strategic Reserve Fund and law enforcement agencies。

This post is part of a series of typical cases that have been recovered from the second invisibility。

Anyone wonder where the money went after the seizure

In traditional criminal justice, the purpose of confiscation of the proceeds of crime is to deprive the offender of illicit benefits and, where possible, to compensate the victim. I don't knowThis logic is not established when the subject of the law is diverted to the encrypted currency。

THE CURRENT UNITED STATES PROVISION (THE FEDERAL CODE) EXPRESSLY SETS THE MAXIMUM AMOUNT OF COMPENSATION AVAILABLE TO VICTIMS AT “FAIR MARKET VALUE AT THE DATE OF LOSS”. THIS MEANS THAT IF THE VICTIM LOSES 10 BTCS AT A PRICE OF $5,000 IN BITCOIN, EVEN THOUGH THE GOVERNMENT HOLDS THE SAME MILLIONS OF ORIGINAL CURRENCY IN ITS POSSESSION, IT WILL BE WORTH A LOT OF MONEYThe victims can also claim only $50,000. The large premium resulting from the price increase is legally vested in the Government。

BRITISH LAW IS ALSO A “HEGEMONIC”. UNDER THE ASSET RECOVERY INCENTIVE PROGRAMME (ARIS), 50 PER CENT OF CONFISCATED ASSETS WENT TO THE POLICE AND PROSECUTION SERVICES INVOLVED IN LAW ENFORCEMENT, AND 50 PER CENT WENT TO THE MINISTRY OF THE INTERIOR. (B) THE INDEPENDENT VICTIM COMPENSATION CHANNEL IS MUCH LESS FUNDED THAN THE FORMER, ANDThe application process is cumbersome and the threshold is high。

In March 2025, United States President Trump signed an executive order establishing the Strategic Bitcoin Reserve, requiring the Treasury to retain, rather than sell, the confiscated bitcoin. This further reinforces the Government ' s motivation to retain and blocks the possible path of compensation for victims at the institutional level。

Typical case: where the victim's money goes

United Kingdom: The Cheon Chi-min case, the world's largest single secret currency confiscation

This is the largest single encrypted currency confiscation operation in the world to date. In October 2018, the Economic Crime Command of the London Police Department raided several properties and seized approximately 61,000 bitcoin. It was worth about £305 million at the time of the crimeBy the end of the trial, it had risen to about Pound5.5 billion (approximately $7.2 billion)。

The defendant, Jian Wen (Chinese-British binational, 42 years old), was convicted in March 2024 and sentenced to six years and eight months' imprisonment, and the mastermind of the scheme, Chi Min (Chinese citizen, 47 years old), was the founder of the Chinese company Blue Skygrath, which lured over 128,000 Chinese senior investors with high returns between 2014 and 2017, in excess of $5.6 billion. She landed in April 2024, pleaded guilty in September 2025 and was sentenced in November of the same year11 years 8 months imprisonment。

The annual meeting at Blue Sky Grid

Where are the victims12.8 million victims were Chinese citizens, many of whom were retired elderlyMany have spent their entire lives saving in order to buy the company's assets, and they all have a very rich dream, even at the stage of liquidation. But at this stage, both the British Government and the Chinese Government have claimed sovereignty over the instalment of bitcoin, and civil recovery procedures are still in progress, but the legal profession has stated frankly that in view of the dual national sovereignty disputeThe likelihood that victims will eventually be paid is low。On the Chinese side, information-gathering on the victims has begun, but it is not clear how many will eventually be compensated, whether the amount awarded will be the equivalent of the current year ' s value or will include the appreciation of bitcoin, even if the funds will ultimately remain in the UK law enforcement agencies。

Financial flows: UK Treasury (projected). Victims ' actual gains: nil, but the case is not yet closed。

United States: Great Silk Road, $3 billion "No Lord."

Silk Road is the most notorious dark-net drug-trading platform in history, whose founder, Ross Ulbricht, was arrested in 2013 and whose huge accumulation of bitcoin continues to be seized。

In November 2021, IRS-CI seized 51,680 bitcoin from a single-board computer hidden in a floor safe in a residential building in Georgia valued at over $3.36 billion. Zhong (32 years old, Georgiaian) stole the currency from the system in 2012 and has been in hiding for nearly 10 years since then, and was sentenced in April 2023 to one year and one day in prison。

Since Silk Road itself is an illegal platformThe court found that there was no "lawful victim" and that neither of the confiscations had entered the government directlyI don't know. In December 2024, a federal judge rejected a claim by an investment company to clear the way for the Government to dispose of its assets. According to the Strategic Bitcoin Reserve Executive Order 2025, the assets may be permanently retained in the Federal Reserve。

Financial flows: United States Treasury Strategic Bitcoin Reserve. Victims ' actual gain: zero。

Princes Group / Huione / Chan Chi, $15 billion outstanding

On 14 October 2025, the Eastern District of the United States Department of Justice made public an indictment against Chen Zhi, founder and chairman of the Prince Holding Group of Cambodia (also known as Vincent, 37 years old, of Cambodian nationality), for two counts of conspiracy in telecommunications fraud and money-laundering, accusing him of operating a base for forced labour "Standard" fraud under his umbrella and of stealing billions of dollars from victims worldwide。

IN PARALLEL WITH CRIMINAL PROSECUTION, DOJ INITIATED CIVIL FORFEITURE PROCEEDINGSThe target was approximately 127,271 bitcoin (approximately $15 billion), which is now in the custody of the United States Government and represents the largest confiscation in the history of the United States。According to the TRM Labs chain analysis, the bitcoin in question has been largely dormant since December 2020, until 2024, when there were signs of renewed activity between June and July, which coincided with the seizure of DOJ。

On the side of accompanying sanctions, the United States Treasury Department OFAC, in association with the British Foreign Affairs, Commonwealth and Development Office (FFDO), imposed sanctions on 146 associated targets under the umbrella of the Princely Group Transnational Crime Organization; FinCEN completed its final decision under section 311 of the Patriot Act to formally cut Huione Group off from the US financial system. FinCEN determined that Huione Group was the key money-laundering hub for North Korea ' s cyber attacks against hacker organizations and South-East Asian transnational criminal organizations, laundering more than $4 billion in illicit proceeds between August 2021 and January 2025。

The details of funds laundered under the Huione Group include $37 million for Internet theft from North Korea, $36 million for encrypted currency investment fraud and $300 million for other network frauds. According to the FBI Internet Crime Complaints Centre in 2024, in the United States of America alone, $5.8 billion was lost as a result of the fraudulent use of encrypted currency in that year. In the confirmed cases, between May 2021 and August 2022, the Brooklyn Money Laundering Network transferred approximately $18 million of illicit proceeds from over 250 United States victims to the Princely Group account. Following the events, South Korea and Singapore announced sanctions against the Crown Prince's Group, which the Ministry of Foreign Affairs of the Republic of Korea called "the largest single sanctions operation in history". The dispute is pending. There is no timetable for the victim compensation programme。

Financial flows: civil confiscation procedures to be determined; victims ' actual gains: as of February 2026, remain zero。

North Korea Lazarus Hacker Group

The Korean national hacker organization Lazarus Group (also known as APT38), which has accumulated over $5 billion since 2014, is the world's most active criminal group of encrypted currency. Major cases include: the theft of Ronin Network (Axie Information) in 2022, $620 million; the theft of Harmony Horizon across the chain in 2022, $100 million; and the theft of Bybit in February 2025, $1.5 billion, the largest single-encrypted currency exchange in history。

The U.S. authorities have initiated civil forfeiture proceedings against a number of assetsCumulative seizure since 2020 of approximately $50 millionLESS THAN 1% OF THE TOTAL AMOUNT STOLEN. IN JUNE 2025, DOJ RECOVERED $7.74 MILLION IN ENCRYPTED ASSETS IN THE CASE OF KOREAN IT OUTSOURCED WORKERS IMPERSONATING AMERICAN FREELANCERS。

The vast majority of the stolen assets disappeared in the chain after being emptied through a mixer. Very little of the assets recovered went to government confiscated accounts and there was no publicly available compensation distribution plan. Out of this $15 billion loss by Bybit, the funding gap for the affected users was largely covered by exchange self-financing rather than by law enforcement recovery。

Financial flows: United States Government confiscated accounts. Victims ' actual gains: very few to none。

LockBit's extortion software. No $500 million ransom was returned

In February 2024, Operation Cronos, led by the British National Bureau of Crime (NCA), brought together law enforcement agencies from more than 10 countries, including the United States, Europe and Australia, to destroy the LockBit global infrastructure, seize 34 servers and freeze more than 200 encrypted currency accounts. In May 2024, DOJ filed 26 charges against Russian citizen Dmitry Khoroshev for the cumulative collection of about $100 million bitcoin as the main developer of LockBit. LockBit has blackmailed more than 120 countries and more than 2,500 victims since 2020, with a total known ransom of over $500 million and over 1,800 victims in the United States。

Law enforcement operations succeeded in distributing about 7,000 decryption keys, preventing further damage to victims who had not yet paid their ransom. However, the funds of institutions that had previously paid ransom (hospitals, schools, government departments, etc.) have not been recovered and there is no special compensation fund. Khoroshev is still hiding in Russia and has been sanctioned by OFAC。

Financial flows: frozen accounts are Government-owned and not distributed. Victims ' actual gain: decryption key (but no cash compensation)。

BTC-e/ Alexander Vinnik, recovery process dilemma

Alexander Vinnik, a Russian citizen, was arrested in Greece in July 2017, and the BTC-e Exchange, which operates, processed more than $9 billion in bitcoin transactions, one of the world ' s largest bitcoin money-laundering platforms at the time. The United States Financial Crimes Enforcement Network (FinCEN) fined BTC-e $110 million. Vinnik, who was extradited to the United States after five years in France, pleaded guilty in May 2024, but before being formally sentenced - February 2025 - was released as a prisoner in exchange for the return of an American journalist arrested in Russia, the criminal proceedings were terminated。

On 30 June 2025, DOJ filed a civil forfeiture action against the remaining BTC-e virtual currency, opening a 60-day complaint window (as of 2 September 2025). Users and other victims can file claims, but the review process is lengthy and detailed transaction records and KYC information are required. Given the multiplicity of assets involved and the large number of claims, the final distribution results are highly uncertain。

Financial flows: to be determined. Victims ' actual gains: the application process is ongoing。

Twitter, hacker, victims of petty fraud never received compensation

On July 15, 2020, a 17-year-old Florida teenager, Graham Ivan Clark, by means of social engineering, invaded twitter internal tools, hijacked about 130 certified accounts of Obama, Biden, Elon Mask, Bill Gates, and issued double-returning bitcoons, deceiving about $1.17 million bitcoin within hours. Clark was sentenced to three years ' imprisonment in March 2021. Law enforcement agencies recovered over $3 million in bitcoin (including proceeds of prior SIM card change)。

This time, the victims of Twitter fraud (a common user who was tricked into sending Bitcoin) have never received any compensation. The encrypted money recovered did not enter the government in the usual procedure, and there was no compensation fund or recourse for the victims of Twitter fraud。

Financial flows: United States Government confiscated accounts. Victims ' actual gain: zero。

Why do victims always get bullied repeatedly

These cases are not accidental but are a corollary to the functioning of both systems。

IN THE UNITED STATES, THE LAW EXPRESSLY PROVIDES THAT THE VICTIM CAN ONLY RECOVER THE "FAIR MARKET VALUE AT THE DATE OF LOSS" RATHER THAN THE ACTUAL VALUE AT THE TIME OF CONFISCATION. THIS MEANS THAT IF A VICTIM LOSES ONE BTC AT A BITCOIN PRICE OF $8,000 IN 2019, EVEN IF THE GOVERNMENT HOLDS THIS BITCOIN WORTH $100,000 TODAY, THE VICTIM CAN ONLY CLAIM $8,000The remaining difference of $92,000 is legally retained by the Government。

IN THE UNITED KINGDOM, THE ASSET RECOVERY INCENTIVE PROGRAMME (ARIS) DIVIDES CONFISCATED ASSETS INTO THREE PARTS: HALF OF THE POLICE AND PROSECUTION SERVICES INVOLVED IN LAW ENFORCEMENT, AND HALF OF THEM INTO THE HOME OFFICE, WHILE THE SEPARATE VICTIM COMPENSATION CHANNEL CAN ALLOCATE MUCH LESS MONEY THAN THE LAW ENFORCEMENT AGENCIES. 2024 TO 2025 FISCAL YEARBRITISH LAW ENFORCEMENT AGENCIES RECEIVED APPROXIMATELY POUND160.3 MILLION THROUGH ARIS, WITH ONLY ABOUT POUND47.2 MILLION IN COMPENSATION FOR VICTIMS OVER THE SAME PERIOD, OR ABOUT 3.4:1。

The United States strategic bitcoin reserves established in 2025 further consolidated this pattern. The executive order expressly instructed the Ministry of Finance to retain, rather than auction, the confiscated bitcoin, making the federal Government one of the world ' s largest Bitcoin holders. This reserve logic creates a fundamental conflict of interest with victim compensation。

AT THE SAME TIME, VICTIMS FACE PROCEDURAL BARRIERS: APPLICATIONS FOR COMPENSATION MUST BE SUBMITTED WITHIN 30 DAYS OF NOTIFICATION, WITH DETAILED COMPLAINTS, INCLUDING WALLET ADDRESSES, TRANSACTION IDS AND KYC RECORDS. IN TRANSNATIONAL CASES, VICTIMS SCATTERED OVER MANY COUNTRIES ARE OFTEN UNAWARE OF UNITED STATES ADMINISTRATIVE PROCEDURESIf the window is missed, the right of appeal will be permanently lost。

In the Money Sismin case, 128,000 elderly Chinese victims turned that investment into a legal dispute between the London Police Office and the British Treasury; in the Silk Road recovery, billions of dollars of bitcoin were locked directly into the United States strategic reserve because there were no legal victims; and in the Huione case, tens of thousands of victims worldwide, despite having been identified, did not see any timetable for compensation in the $15 billion confiscation operation。

If justice is served by bringing the perpetrators to justice, who is paying for these "legitimate secondary thefts"