The British government may sell seized bitcoins to ease the public deficit.
According to The Telegraph, the UK could liquidate over £5 billion (around $6.7 billion) in bitcoin seized by authorities. The report states that the British Treasury is working with law enforcement to coordinate the sale of these assets.
Chancellor Rachel Reeves and the Home Office are reportedly directly involved in the operation. Traditionally, police forces manage the sale of confiscated digital assets independently, but bitcoin’s recent price surge has drawn the attention of the central government.
The origin of the funds
Most of the bitcoins held by the UK government stems from a 2018 seizure, when authorities confiscated at least 61,000 BTC from a Chinese Ponzi scheme. The case involved Jian Wen, a hospitality worker who attempted to launder proceeds from the fraudulent investment run by Tianjin Lantian Gerui Electronic Technology.
Wen was later convicted of money laundering and sentenced to six years and eight months in prison in May 2024, after trying to purchase a luxury mansion using the illicit funds.
Ongoing legal disputes
The UK’s potential liquidation of the bitcoins is not without legal hurdles. In 2024, victims of the Ponzi scheme launched a legal battle to recover the funds, involving China’s Ministry of Foreign Affairs in diplomatic negotiations.
Susie Violet Ward, CEO of Bitcoin Policy UK, criticized the reports of the sale as “pure sensationalism,” emphasizing that “the UKs bitcoin is still legally contested.” Ward noted that “Chinese authorities and victims are demanding it back. No sale can happen while that legal process is unresolved.
According to Freddie New, head of policy at Bitcoin Policy UK, the victims lost Chinese yuan, not bitcoin directly. This legal nuance could complicate the negotiations for the restitution of funds.
The Crown Prosecution Service has formally requested that the High Court retain custody of the seized bitcoins, with the aim of selling the assets and distributing the proceeds among law enforcement agencies and, potentially, compensating victims according to court orders.
Jordan Walker, founder of Bitcoin Collective, wrote a letter to the UK government discouraging the sale, arguing that “selling these holdings to address a short-term budget deficit would send a concerning signal,” adding it could have “long-term consequences for the UK’s economic positioning.”
Bitcoin Policy UK had already written to the government in July 2024, urging legislative changes that would allow greater discretion in retaining “valuable assets”—a proposal that appears to have been ignored.
Last May, the UK government attempted to issue a £40 million tender for a “crypto custody and realization framework,” which would have allowed police forces to manage and safeguard seized cryptocurrencies. However, the tender was cancelled due to a lack of suitable bids.
