The UK Government Holds 61,245 Seized Bitcoin, and One of Its Own Officers Went to Prison for Stealing 50. An October 12 Ruling Decides Who Keeps the $5 Billion.

The UK government currently holds a massive stash of 61,245 seized Bitcoins (CRYPTO: BTC), taken from devices in London in 2018. This cryptocurrency is now worth approximately $5.1 billion. On October 12, 2026, Mr. Justice Mark Turner issued a ruling in civil recovery proceedings. This legal process allows the state to take property linked to crime even without a new criminal conviction. The court determined that Chinese law applies when deciding whether victims of fraud still have rights to the frozen coins.

This ruling improves the UK government’s chances of retaining most of the gains, although an appeal is ongoing, leaving ownership uncertain. The UK has already navigated a similar situation. In 2017, former National Crime Agency officer Paul Chowles stole 50 bitcoin that his agency had seized from a dark web operator.

On September 30, prosecutors successfully secured a £1.81 million confiscation order against him. This order mandates a convicted criminal to repay any financial gains from their crime. As the value of UK seized bitcoin rises after confiscation, a pressing question arises: who owns the profits?

Why One Legal Distinction Decides Who Owns the Seized Bitcoin

The coins in question are linked to Ponzi schemes run in China, where old investors are paid with money from new investors. Qian, the defendant in this case, was sentenced to 11 years and eight months in prison in November 2025 after admitting to fraud and money laundering. Her victims had originally invested around £640 million, though other estimates suggest the total loss could be as high as £3.8 billion. This puts the UK as the third-largest government holder of bitcoin, behind the U.S. (328,372) and China (190,000).

The dispute over the profits centers on a critical legal distinction. A proprietary interest means that the law recognizes the victim as the owner of the specific asset taken, allowing them to claim any gains that arise from it. In contrast, a creditor’s claim means the victim is owed only a sum of money, so any subsequent gains belong to the current holder—here, the UK government.

Mr. Justice Turner’s ruling puts the question to Chinese law. Jackson Ng, a partner at Duan and Duan UK LLP, summarized the ruling: “The Court has held that whether victims retain rights in the frozen bitcoin is to be decided under Chinese law.” Under Ng’s interpretation, claimants must demonstrate a proprietary interest; a simple creditor’s claim won’t suffice.

The actual number of victims is likely lower than it appears. An audit found at least 128,409 investment contracts related to the case, but the court clarified that this figure doesn’t represent the number of actual victims—one investor could sign multiple contracts. About 16,000 Chinese claimants have joined the UK proceedings, with one firm representing roughly 5,700 of them.

How a UK Officer Stole 50 Seized Bitcoin and Got Caught

Chowles, 44, extracted cryptocurrency from devices seized from Thomas White, the creator of Silk Road 2.0, a dark web marketplace. White was sentenced to 64 months in prison in April 2019 for his role in the illegal marketplace.

In May 2017, 50 of the 97 bitcoin seized from White were moved out of a retirement wallet in two transactions. Those coins then passed through Bitcoin Fog, a mixer designed to obscure their source. Chowles cashed out using two debit cards and made five withdrawals, with prosecutors estimating his total financial gain at £613,147.

Initially, investigators suspected White, and by late 2021, they had categorized the bitcoin as untraceable. White claimed that someone in the agency had taken the coins since they held the private keys, which are essential to control a wallet. After White’s release, Merseyside Police learned of the theft in a meeting, and Chowles was arrested in May 2022. Evidence linked him directly to the transfers, including an iPhone and notebooks containing passwords for White’s accounts. Chowles pleaded guilty on May 23, 2025, and was sentenced to five and a half years in prison. Detective Chief Inspector John Black of Merseyside Police stated, “This case should illustrate in the starkest terms that nobody is above the law.”

How the UK Kept the Bitcoin Gains in the Chowles Case

The 50 bitcoin stolen by Chowles were worth £59,409 at the time of the theft but soared to over £4.4 million by the time of sentencing. The £1.81 million confiscation order included the value of 30 bitcoin recovered from him, and the court also imposed a compensation order for the victim. This scenario highlights how the state can benefit from cryptocurrency gains.

Additionally, the agency sold White’s remaining 47 bitcoin to partly satisfy his £1.56 million confiscation order, leaving £1.07 million outstanding. In the past five years, the CPS Proceeds of Crime Division has successfully recovered over £530 million from confiscation orders, with slightly more than £102 million returned to victims.

Will the UK Government Keep the Seized Bitcoin Gains?

As the legal proceedings continue, the UK government will likely retain a significant portion of the seized bitcoin gains, mainly because claimants must demonstrate a proprietary interest in the assets.

That answer could change if an appeal court sets aside the Chinese-law holding. The ruling also moves no frozen coins onto the market, though the 47 bitcoin sold in the White case show UK authorities have sold seized bitcoin before.

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