UK Treasury Eyes Major Crypto Selloff
The UK Treasury is reportedly preparing to sell off £5 billion ($6.7B) worth of seized Bitcoin in a move aimed at plugging a growing budget deficit. The Home Office and Chancellor Rachel Reeves are working closely with law enforcement to create a storage system for the crypto assets before launching the sale.
This massive liquidation, timed amid a Bitcoin bull run, could potentially disrupt the market. The holdings include at least 61,000 BTC tied to a 2018 Chinese Ponzi scheme, currently valued around $7.1 billion. While the exact total of the UK’s seized BTC is unknown, the massive stash has reignited a debate over how the government should handle digital assets.
Legal Fight Over Ponzi Seizure Clouds Treasury’s Plans
Critics argue the reported sale is premature and legally dubious. Susie Violet Ward, CEO of Bitcoin Policy UK, slammed the news as “sensationalism over substance,” stressing on X that “no sale can happen while that legal process is unresolved.” The 61,000 BTC stems from the Tianjin Lantian Gerui Electronic Technology scam, where Jian Wen, a hospitality worker, tried to buy real estate with the laundered BTC.
Though Wen was jailed in May 2024, the scheme’s victims in China are actively pressing the UK to return the assets. In April, they even appealed to China’s Foreign Affairs Ministry to negotiate directly with the UK. At the same time, Britain’s Crown Prosecution Service has requested the High Court to let it keep the coins under proceeds of crime laws, which could allow the sale to proceed—pending legal clarity.
Debate Over Who Deserves the Bitcoin
Adding complexity, Bitcoin Policy UK’s Freddie New pointed out that victims lost yuan, not Bitcoin, raising questions about whether the UK should even consider restitution in BTC. If courts approve the sale, funds would be used to pay confiscation orders, cover legal and police costs, and only then potentially return money to the Treasury.
According to New, “after costs and victim paybacks,” any leftover BTC or cash “could be split between bodies involved in asset recovery,” such as law enforcement. But critics say offloading the Bitcoin now ignores its potential strategic and financial upside for the UK.
Crypto Advocates Urge UK to Keep BTC Reserves
The idea of retaining Bitcoin as a national reserve isn’t new. In July 2024, Bitcoin Policy UK formally urged the government to amend the law and retain seized BTC, calling it a valuable asset. The proposal went ignored.
Now, amid reports of a potential fire sale, Bitcoin Collective founder Jordan Walker issued an open letter, warning that selling the holdings could carry long-term risks for the UK’s economic future.
Meanwhile, the government’s previous plan to create a £40M crypto storage framework collapsed after failing to attract adequate bids. Despite mounting pressure, the Treasury has made no official statement confirming or denying the selloff.
