US Wants To Keep 127,000 BTC In Largest Forfeiture in History

The US Department of Justice (DOJ) has taken control over approximately 127,000 BTC belonging to Chen Zhi, also known as “Vincent,” the founder and chairman of Prince Holding Group (Prince Group), a multinational business conglomerate based in Cambodia, who has been charged with wire fraud conspiracy and money laundering conspiracy for directing Prince Group’s operation of forced-labor scam compounds across Cambodia.

Zhi held individuals "against their will in the compounds engaged in cryptocurrency investment fraud schemes, known as 'pig butchering' scams," the DOJ writes, "that stole billions of dollars from victims in the United States and around the world. The defendant is at large."

Along with the criminal charges against Zhi, the DOJ has filed a request for forfeiture of Zhi's assets, which include over 127,000 BTC, or roughly $14 Billion. The complaint is the largest forfeiture action in the history of the Department of Justice.

With the establishment of the Strategic Bitcoin Reserve, which outlines the use of forfeited assets on behalf of the Government, it is speculated that the seized BTC may be used to contribute to the US Government's strategic bitcoin holdings. As Zack Shapiro of the Bitcoin Policy Institute highlights, according to "the SBR Executive Order, any coins that can be traced to identifiable victims must first be returned to them."

But the reality of civil asset forfeiture often looks different.

DOJ is "Fighting for the Victims," but Civil Asset Forfeiture Grants Them Virtually No Rights

According to the DOJ, "the defendant directed one of the largest investment fraud operations in history, fueling an illicit industry that is reaching epidemic proportions."

"Prince Group’s investment scams have caused billions of dollars in losses and untold misery to victims around the world, including here in New York, on the backs of individuals who have been trafficked and forced to work against their will," the DOJ continues. "This historic indictment and forfeiture complaint sends a strong message to fraudsters everywhere that we will pursue you no matter where you are, no matter who you are, and no matter your insidious methods, and we will never stop fighting for victims.”

But once the civil forfeiture is approved by the court, the US Government owns the assets.

According to federal regulations, victims of the scam may file a formal claim or notice of interest, and apply for so-called remission once the forfeiture is final – but getting money back from civil asset forfeiture is not exactly easy.

As Cato Institute explains in a 2024 article titled "The FBI Puts Victims of Civil Forfeiture through Bureaucratic Hell," civil asset forfeiture is subject to "perverse incentives [...] which often lead to egregious violations of constitutional rights" that "places the burden on victims to challenge forfeiture orders, often at great cost."

According to the Stanford Law Review, "the government rarely returns forfeited assets to people": In 2022, only around 3% of all forfeited assets were returned, and only 1% of the value of total assets forfeited.

"Bitcoins were stolen from victims, worldwide, conned by professional scammers," writes Bull Bitcoin CEO Francis Pouliot on X. "Miraculously, the coins are found and can now be returned to victims, many of which I'm sure had lives ruined. And the first thing the SBR proponents think is 'we can steal those Bitcoin too'."

"Victims can of course submit restitution claims," Shapiro counters on X, but restitution is commonly part of sentencing procedures – making it unclear how restitution would be granted if the defendant remains at large.

Wether the Government will put forward a victim compensation plan or the seized BTC will be contributed towards the Strategic Reserve remains to be seen – but if civil forfeiture history is any tell at all, it may not look good for those who fell victim to Zhi.

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