- The UK Treasury is reportedly planning to sell up to $7 billion in seized Bitcoin to help fill a budget deficit, sparking concerns it could disrupt the ongoing crypto bull run.
- However, legal disputes from victims of a Chinese Ponzi scheme and crypto advocates are challenging the sale, arguing the Bitcoin is still under legal contestation.
A new report has ignited concerns across the crypto market, claiming the UK Treasury is preparing to sell approximately £5 billion ($6.7 billion) worth of seized Bitcoin in a bid to help plug a budget deficit.
The move, reportedly backed by Chancellor Rachel Reeves and the Home Office, comes at a time when Bitcoin is riding a renewed bull rally, sparking fears that such a large-scale sell-off could dampen the market’s momentum.
The stash in question allegedly includes at least 61,000 BTC, currently valued at over $7.1 billion, which was seized in connection with a Chinese Ponzi scheme dating back to 2018. The Bitcoin was recovered after Jian Wen, a UK-based hospitality worker, was convicted in 2024 for attempting to launder the proceeds by purchasing luxury real estate.
However, the proposed sale is far from certain. Legal complications persist, with victims of the Chinese scheme still actively seeking the return of the Bitcoin. Susie Violet Ward, CEO of Bitcoin Policy UK, dismissed the Telegraph’s report as “sensationalism,” emphasizing that no sale can proceed while the asset’s legal status remains unresolved. “Chinese authorities and victims are demanding it back,” she wrote on X, adding that the matter is still before the courts.
Despite these legal hurdles, the UK government appears to be positioning itself to offload the crypto. In May, the Crown Prosecution Service petitioned the High Court to allow it to retain the Bitcoin under proceeds of crime laws, which could enable the sale of the assets.
Under such laws, the proceeds would first be used to compensate victims, with any remaining funds potentially diverted to law enforcement and the Treasury.
Critics argue that selling the Bitcoin now would be shortsighted. Jordan Walker, founder of the advocacy group Bitcoin Collective, issued an open letter warning that liquidating the holdings to address a short-term fiscal gap could undermine the UK’s long-term economic strategy.
It would send a concerning signal to global investors, he wrote.
Bitcoin Policy UK also revealed that it had urged the government as recently as July 2024 to consider retaining the Bitcoin as a strategic asset rather than selling it. However, that advice appears to have gone unheeded.
Adding to the confusion, a £40 million crypto storage and realization framework, designed to handle seized assets, was recently terminated due to a lack of suitable bids.
While the Treasury has yet to officially comment, the prospect of such a large BTC sale is already stirring market anxiety. With legal battles, diplomatic tensions, and economic calculations all in play, whether the UK proceeds with the sale could have major implications for the crypto market and its role in national finance.
