The United Kingdom government is reportedly considering the sale of over 5 billion British pounds (approximately $6.7 billion) worth of seized Bitcoin to help address a significant deficit in the country's budget. The Home Office, in collaboration with Chancellor of the Exchequer Rachel Reeves, is said to be working with law enforcement agencies to offload its substantial cryptocurrency stockpile. This potential sale could have a notable impact on the recently revitalized Bitcoin and broader crypto rally.
While police typically manage crypto sales in the UK, the Treasury's involvement has reportedly increased due to the soaring value of the government's holdings amidst the recent crypto market surge. The exact total of seized Bitcoin held by the UK is not publicly known, but it is confirmed to include at least 61,000 Bitcoin, currently valued at around $7.1 billion. This particular stash was seized in 2018 from a Chinese Ponzi scheme that had ties to the UK. Discussions around the UK selling its Bitcoin holdings surfaced earlier this year, with reports in January indicating Reeves' interest in using the crypto to plug budget gaps.
However, the UK's plans face a significant obstacle: the victims of the Chinese Ponzi scheme have been actively seeking the return of their Bitcoin since 2024. Susie Violet Ward, CEO of the crypto lobby group Bitcoin Policy UK, strongly criticized the sale reports, labeling them "sensationalism over substance." She emphasized that the UK's Bitcoin is "still legally contested," with both Chinese authorities and the victims demanding its return, implying that "No sale can happen while that legal process is unresolved."
The Bitcoin was seized in 2018 following the arrest of hospitality worker Jian Wen, who attempted to launder funds from the Tianjin Lantian Gerui Electronic Technology investment scheme by trying to purchase a mansion with Bitcoin. Wen was subsequently convicted of money laundering in March of last year and sentenced to six years and eight months in May 2024. In April 2024, a group representing the Ponzi scheme's victims appealed to China's Foreign Affairs Ministry to negotiate with the UK for the recovery of the Bitcoin.
Conversely, the Crown Prosecution Service (CPS) has petitioned the High Court for permission to retain the Bitcoin seized from the scheme. If successful, these funds could be sold, with proceeds potentially split among various law enforcement agencies.
Freddie New, Head of Policy at Bitcoin Policy UK, clarified on X that any sale of the crypto would occur under proceeds of crime laws, which mandate that assets are sold "to satisfy confiscation orders" and compensate victims if ordered by a court. He added a crucial "extra wrinkle" to the situation, noting that the victims originally lost yuan, not Bitcoin, and there may be ongoing diplomatic efforts to request the Bitcoin itself rather than the yuan equivalent. New further explained that after accounting for costs and victim compensation, any remaining funds would be allocated to the Treasury and potentially distributed among "those bodies involved in the asset recovery," such as the police.
In a related development, the UK had previously issued a tender in May for a 40 million British pound ($53.7 million) "crypto storage and realisation framework." This initiative aimed to establish a system allowing police to securely store and manage seized crypto assets. However, the tender was terminated earlier this month, with the government stating it had not received bids that could adequately fulfill its requirements.
Despite the government's apparent intent to sell, crypto advocacy groups are urging the UK to reconsider. Freddie New stated that Bitcoin Policy UK had written to the government in July 2024, advising them to amend existing laws to grant themselves "more discretion to retain this valuable asset," advice which he claims was disregarded.
Similarly, Jordan Walker, founder of the Bitcoin Collective crypto advocacy group, penned an open letter to the government, imploring them not to sell the Bitcoin in light of The Telegraph's report. Walker warned that "Selling these holdings to address a short-term budget deficit would send a concerning signal," and could have "long-term consequences for the UK’s economic positioning."
July 2025, Cryptoniteuae