Author: jk , Odaily Planet Daily

Edited by: Hao Fangzhou

Since 2018, US and UK law enforcement agencies have seized over $40 billion in cryptocurrency assets in more than a dozen major cases. However, in the vast majority of these cases, victims have yet to receive a single penny . The digital assets that should have been returned to the victims have quietly flowed into government treasuries, strategic reserves, and law enforcement operating budgets.

This article analyzes several typical cases to reveal this hidden secondary robbery.

Has anyone ever wondered where the money went after it was confiscated?

In traditional criminal justice, the purpose of confiscating the proceeds of crime is to deprive offenders of their illegal gains and, where possible, to compensate victims. However, this logic no longer holds true when law enforcement targets cryptocurrencies.

Current U.S. regulations (Federal Code) explicitly cap the compensation a victim can receive at "the fair market value on the date the loss occurred." This means that if a victim lost 10 BTC when the price of Bitcoin was $5,000, even if the government held that entire batch of coins worth millions, the victim could only claim $50,000. The substantial premium resulting from the price increase belongs to the government under the law.

British law is similarly "overbearing." Under the Asset Recovery Incentive Scheme (ARIS), 50% of seized assets go to the police and prosecutors involved in enforcement, while the other 50% goes to the Home Office. Independent victim compensation channels receive far less funding than the former two, and the application process is cumbersome and has high barriers to entry.

In March 2025, US President Trump signed an executive order establishing a "strategic Bitcoin reserve," requiring the Treasury Department to retain rather than sell confiscated Bitcoins. This further strengthened the government's incentive to retain Bitcoins, effectively blocking possible avenues for victims to receive compensation at the institutional level.

Typical Case: Where Did the Victims' Money Go?

UK: Qian Zhimin case – world's largest single cryptocurrency seizure

This is the largest single cryptocurrency seizure operation in history. In October 2018, the Metropolitan Police's Economic Crime Command raided multiple properties, seizing approximately 61,000 bitcoins. At the time of the raid, they were worth about £305 million; by the end of the trial, this had risen to approximately £5.5 billion (about $7.2 billion).

Defendant Jian Wen (dual Chinese and British citizen, 42 years old), the money laundering intermediary for this batch of Bitcoins, was convicted in March 2024 and sentenced to 6 years and 8 months in prison. The mastermind behind the scheme, Qian Zhimin (Chinese citizen, 47 years old), was the founder of the Chinese company "Lantian Gree," which defrauded over 128,000 elderly Chinese investors between 2014 and 2017 by offering high returns, involving over US$5.6 billion. She was arrested in April 2024, pleaded guilty in September 2025, and was sentenced to 11 years and 8 months in prison in November of the same year.

The annual meeting once held by Blue Sky Green Company

What about the victims? All 128,000 victims are Chinese citizens, many of whom are retired elderly. Many poured their life savings into purchasing the company's assets, driven by a dream of instant wealth, even as the liquidation and compensation process began. However, both the British and Chinese governments claim sovereignty over the Bitcoin, and civil recovery proceedings are ongoing. Legal experts admit that given the dual sovereignty dispute, the likelihood of the victims ultimately receiving compensation is very low. In China, information gathering on the victims has begun, but it remains unknown how many will ultimately receive compensation, whether the compensation will be the original value or include the increased value of the Bitcoin, or even whether the funds will ultimately remain with British law enforcement.

Funds flowed to: UK Treasury (estimated). Actual proceeds received by victims: zero, but the case is not yet closed.

United States: A major Silk Road case involving three billion US dollars in "unclaimed wealth"

Silk Road is the most notorious dark web drug trafficking platform in history. After its founder, Ross Ulbricht, was arrested in 2013, the huge amount of Bitcoin accumulated on the platform was gradually seized.

In November 2021, the IRS-CI seized 51,680 bitcoins, worth over $3.36 billion, from a single-board computer hidden in a floor safe at a Georgia home. Zhong (32, a Georgia resident) stole the coins in 2012 by exploiting a system vulnerability and remained at large for nearly a decade before being sentenced to one year and one day in prison in April 2023.

Because Silk Road itself was an illegal platform, the court determined that there were no "legitimate victims," and both batches of seized assets were directly confiscated by the government . In December 2024, a federal judge rejected a claim by an investment firm, clearing the way for the government to dispose of the assets. Under the 2025 Strategic Bitcoin Reserve Executive Order, these assets may remain permanently in the Federal Reserve.

Funds flowed to the U.S. Treasury Strategic Bitcoin Reserve. Actual proceeds received by victims: zero.

Prince Group / Huione / Chen Zhi case, a $15 billion unsolved case

On October 14, 2025, the U.S. Department of Justice filed an indictment in the Eastern District of New York federal court against Chen Zhi (also known as Vincent, 37, Cambodian national), founder and chairman of Prince Holding Group, on two counts of conspiracy to commit wire fraud and conspiracy to commit money laundering. The indictment alleges that he led the operation of his forced labor "pig butchering" scam base, defrauding victims worldwide of billions of dollars.

Simultaneously with the criminal prosecution, the DOJ filed a civil forfeiture lawsuit targeting approximately 127,271 bitcoins (worth about $15 billion), which are now in the custody of the US government, representing the largest forfeiture operation in US history. According to on-chain analysis by TRM Labs, these bitcoins were largely dormant since December 2020, showing signs of renewed activity between June and July 2024, coinciding with the DOJ's seizure operation.

In terms of supporting sanctions, the U.S. Treasury Department's OFAC, in conjunction with the UK's Foreign, Commonwealth and Development Office (FCDO), imposed sanctions on 146 related targets of the Prince Group transnational criminal organization. FinCEN, pursuant to Section 311 of the Patriot Act, completed its final ruling, formally cutting off the Huione Group from the U.S. financial system. FinCEN determined that the Huione Group was a key money laundering hub for North Korean cyberattack groups and Southeast Asian transnational criminal organizations, laundering over $4 billion in illicit proceeds between August 2021 and January 2025.

The Huione Group's laundered funds include: $37 million from North Korean cyber theft, $36 million from cryptocurrency investment fraud, and $300 million from other online scams. According to a 2024 report by the FBI's Internet Crime Complaint Center, cryptocurrency investment fraud losses in the United States reached $5.8 billion that year alone. In confirmed cases, a Brooklyn money laundering network transferred approximately $18 million in illicit proceeds from over 250 U.S. victims to Prince Group accounts between May 2021 and August 2022. Following the exposure of the scandal, South Korea and Singapore followed suit, announcing sanctions against Prince Group. The South Korean Ministry of Foreign Affairs called it the "largest single sanctions action in history." The controversy remains unresolved. There is still no timetable for a compensation plan for the victims.

Fund flow: Civil confiscation proceedings pending; Actual proceeds received by victims: As of February 2026, still zero.

The recovery of evidence from the North Korean Lazarus hacking group is just the tip of the iceberg.

The North Korean state-sponsored hacking group Lazarus Group (also known as APT38) has stolen over $5 billion in cryptocurrency since 2014, making it the most active cryptocurrency crime group globally. 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, which is the largest single cryptocurrency exchange hack in history.

U.S. authorities have filed civil forfeiture lawsuits over multiple batches of assets, seizing approximately $50 million since 2020 , representing less than 1% of the total stolen amount. In June 2025, the DOJ recovered $7.74 million in crypto assets in connection with a case involving North Korean IT contractors posing as U.S. freelancers.

The vast majority of stolen assets disappeared on the blockchain after being laundered by mixers. The very small amount of recovered assets flowed into government seizure accounts, with no publicly disclosed compensation distribution plan. In Bybit's $15 billion loss, the funding gap for affected users was primarily filled by the exchange's own funds, rather than through law enforcement seizures.

Funds flowed to: the US government seized the accounts. Actual proceeds received by victims: very little to nothing.

In the Lockbit ransomware case, not a single penny of the $500 million ransom was returned.

In February 2024, Operation Cronos, led by the UK's National Crime Agency (NCA) and in collaboration with law enforcement agencies 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 filed 26 charges against Russian citizen Dmitry Khoroshev, accusing him of receiving approximately $100 million in Bitcoin kickbacks as a key LockBit developer. Since 2020, LockBit has extorted over 2,500 victims in over 120 countries, with known ransoms exceeding $500 million, including over 1,800 victims in the United States.

The enforcement operation successfully distributed approximately 7,000 decryption keys, preventing further losses for some victims who had not yet paid the ransom. However, funds already paid by institutions (hospitals, schools, government departments, etc.) have not been recovered, and there is no dedicated compensation fund. Khoroshev remains at large in Russia, and OFAC has imposed sanctions on him.

Funds flow: The frozen accounts belong to the government and have not been allocated. Actual proceeds received by victims: Decryption keys (but no cash compensation).

The BTC-e / Alexander Vinnik case: difficulties in the recovery process.

Russian citizen Alexander Vinnik was arrested in Greece in July 2017. His BTC-e exchange processed over $9 billion in Bitcoin transactions, making it one of the world's largest Bitcoin money laundering platforms at the time. The U.S. Financial Crimes Enforcement Network (FinCEN) fined BTC-e $110 million. After serving five years in prison in France, Vinnik was extradited to the United States, pleaded guilty in May 2024, but was released in February 2025 as part of a prisoner-for-prisoner exchange for the release of an American journalist arrested in Russia, thus ending the criminal proceedings.

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

Funds flow: To be determined. Actual proceeds received by the victim: Claim process is in progress.

In the Twitter hacking case, victims of small-amount scams never received compensation.

On July 15, 2020, 17-year-old Graham Ivan Clark from Florida used social engineering to hack into Twitter's internal tools, hijacking approximately 130 verified accounts, including those of Obama, Biden, Elon Musk, and Bill Gates, and posting "double your Bitcoin" scam tweets, defrauding people of approximately $117,000 in Bitcoin within hours. Clark was sentenced to three years in prison in March 2021. Law enforcement agencies recovered over $3 million in Bitcoin from Clark's account (including proceeds from a previous SIM card number-switching scam).

The victims of this Twitter scam (ordinary users who were tricked into sending Bitcoin) have never received any compensation. The recovered cryptocurrency was confiscated by the government through standard procedures, and there is no dedicated compensation fund or appeal channel for victims of Twitter scams.

Funds flowed to: the US government seized the accounts. Actual proceeds received by the victims: zero.

Why are victims repeatedly bullied?

The above cases are not accidental, but rather an inevitable result of the operation of the two systems.

In the United States, the law explicitly states that victims can only claim the "fair market value on the date the loss occurred," not the actual value at the time of confiscation. This means that if a victim lost 1 BTC when the price of Bitcoin was $8,000 in 2019, even if the government held that Bitcoin worth $100,000 today, the victim could only claim $8,000, with the remaining $92,000 difference legally retained by the government.

In the UK, the Asset Recovery Incentive Scheme (ARIS) splits seized assets into three parts: half goes to the police and prosecutors involved in law enforcement, half goes to the Home Office, and the remaining amount received by the separately established victim compensation channel is far less than the share given to law enforcement agencies. In the 2024-2025 fiscal year , UK law enforcement agencies received approximately £160.3 million through ARIS, while victim compensation during the same period was only about £47.2 million, a ratio of approximately 3.4:1.

The establishment of a strategic Bitcoin reserve in the United States by 2025 further solidifies this pattern. The executive order explicitly instructs the Treasury Department to retain, rather than auction off, confiscated Bitcoin, making the federal government one of the world's largest holders of Bitcoin. This reserve logic creates a fundamental conflict of interest with victim compensation.

At the same time, victims also face procedural barriers: to claim compensation, detailed complaint materials, including wallet address, transaction ID, and KYC records, must be submitted within 30 days of the notification. In transnational cases, victims scattered across multiple countries are often completely unaware of U.S. administrative procedures, and missing the window of opportunity will permanently forfeit their right to appeal.

In the Qian Zhimin case, 128,000 elderly Chinese victims watched their life savings investment turn into a legal dispute between the Metropolitan Police and the British Treasury; in the Silk Road confiscation case, billions of dollars worth of Bitcoin were directly locked into the US strategic reserves due to the legal determination of "no legitimate victims"; in the Huione case, tens of thousands of "pig butchering" victims worldwide, despite being identified, saw no timetable for compensation in the $15 billion confiscation operation.

If bringing criminals to justice is considered upholding justice, then who is paying the price for these "legitimate secondary robberies"?

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