Following the extradition of Prince Group founder Chen Zhi—suspected of cross-border money laundering and telecom fraud—from Cambodia to China on Wednesday, the handling of his widespread criminal proceeds and assets has drawn intense attention. The US announced in October last year that it had 'seized' 127,000 bitcoins belonging to Chen Zhi, currently worth as much as $11.5 billion (46.788 billion MYR), but China questioned the legitimacy of the US authorities, claiming that the huge volume of cryptocurrency was taken by hackers. With Chen Zhi now in China’s custody, some analysts suggest China gains crucial leverage regarding ownership of these massive assets, and negotiations between China and the US may be required—involving complicated issues of digital sovereignty and judicial jurisdiction.
Chen Zhi, a 38-year-old born in Fujian, is accused of running a scam park in Cambodia, operating online casinos, human trafficking, and forced labor. The Chinese Ministry of Public Security confirmed the extradition to Beijing with Cambodian cooperation, specifically noting his Chinese nationality and stressing that the case would be prosecuted by China. Although Chen Zhi acquired Cambodian citizenship in 2014, it was revoked by Cambodian authorities last month.
In October last year, the US Department of Justice filed charges against Chen Zhi for telecom fraud and money laundering, and made a high-profile announcement of the seizure of 127,000 bitcoins as criminal proceeds—the largest forfeiture ever recorded in US judicial history. The indictment claims that Chen Zhi operated a global 'pig-butchering' (romance investment scam) network, luring victims worldwide—including over 250 in the US alone—to invest funds into cryptocurrencies via social media.
A month later, China’s National Computer Virus Emergency Response Center released a report claiming that the bitcoins 'seized' by the US likely originated from the 'LuBian mining pool' theft in 2020, calling it a classic 'black eats black' scenario. The LuBian mining pool was mainly operated from China and Iran; prior to being stolen, those bitcoins were held by Chen Zhi. Afterward, they remained dormant—'clearly inconsistent with typical hacker behavior motivated by quick profit-seeking'—and their operational patterns more closely matched those of 'state-sponsored hacker organizations.'
China Newsweek reported that the US Department of Justice had not publicly detailed how the bitcoins were seized in its indictment. The same month, Chen Zhi’s legal team filed a motion with a US court, arguing that the DOJ’s accusations were 'seriously flawed' and that the government had failed to provide evidence directly linking the seized bitcoins to fraudulent activities.
●Foreign Media: Recovery Lawsuits May Become International Disputes
Du Guodong, partner at Beijing Haotian Law Firm, questioned whether the US 'seizure' had legitimate legal basis and procedures. As Bitcoin is recognized as a legal asset in most jurisdictions, it can be recovered using judicially recognized technical means. Whether there are defects in the US asset recovery procedures remains to be seen.
Analysts point out that with Chen Zhi’s extradition, China now holds greater bargaining power over the ownership of the massive digital assets. The Wall Street Journal reported that Chen Zhi laundered money via more than 100 companies in 30 countries, and that the Chinese and US governments would need to negotiate asset allocation to divide the seized funds. Litigation over asset recovery could escalate into an international dispute, with actual restitution possibly taking years.
According to Chinese criminal law, large-scale economic fraud and organized forced labor attract severe penalties; if the amount involved is substantial or forced labor/organized crime is confirmed, sentences can be as severe as life imprisonment. Chinese authorities are reportedly studying which charges to bring against Chen Zhi.