UK Treasury Plans to Sell $7 Billion in Seized Bitcoin

The United Kingdom is making headlines in the crypto world once again, as reports surface that the Treasury is preparing to offload a massive trove of seized Bitcoin—valued at over $7 billion. 

This move, intended to help fill a growing budget deficit, has sparked controversy and raised serious questions about the potential market impact, legal entanglements, and political motivations behind the decision.

According to a new report from The Telegraph and corroborated by Cointelegraph, the UK government—spearheaded by the Home Office and Treasury head Rachel Reeves—is collaborating with law enforcement to liquidate the country’s crypto holdings. 

The vast majority of these funds originate from a Chinese Ponzi scheme dating back to 2018, making this sale one of the largest government crypto liquidations to date.

Read Also: Bitcoin Hits a New All-Time High: What's Next?

Key Takeaways

• The UK Treasury may sell over $7 billion in seized Bitcoin, including 61,000 BTC tied to a Chinese Ponzi scheme.
• The sale aims to address the UK’s growing budget deficit, as proposed by Treasury officials and law enforcement.
• Legal challenges remain, as Ponzi victims and Chinese authorities are demanding the return of the Bitcoin.
• The sale could pressure Bitcoin prices, especially during a sensitive bull market upswing.
• Crypto advocates warn of long-term damage, arguing the sale is short-sighted and politically driven.

Why Is the UK Selling Seized Bitcoin?

The British government is facing mounting fiscal pressures, and with the recent crypto market rally, officials see an opportunity to convert Bitcoin into liquidity. Treasury sources reportedly believe the high market valuation of the seized assets presents a timely chance to fund budget gaps.

Although UK police typically handle the disposal of seized crypto, the Treasury’s involvement marks a significant shift. A proposed “crypto storage and realization framework” worth £40 million was even issued to manage this process, though it was canceled earlier this month due to inadequate bids from private firms.

The government is likely aiming to proceed with sales through proceeds-of-crime laws that allow them to confiscate and auction off assets from criminal activities.

What Bitcoin Is Being Sold?

The largest chunk of Bitcoin—at least 61,000 BTC—was confiscated in a 2018 money laundering case involving Jian Wen, a hospitality worker attempting to purchase luxury property using funds traced to a Chinese Ponzi scheme. The scheme had ties to Tianjin Lantian Gerui Electronic Technology and defrauded thousands of investors.

Wen was convicted in March 2024 and sentenced in May to over six years in prison. However, this stash of Bitcoin remains legally contested by Chinese authorities and victims of the fraud.

Legal and Ethical Tensions

The sale is far from a done deal. According to Susie Violet Ward, CEO of Bitcoin Policy UK, the plan represents “sensationalism over substance.” She points out that the Bitcoin is under active legal dispute, and no sale can proceed until ownership rights are resolved.

Further complicating matters, a group representing victims of the original Ponzi scheme formally appealed to China’s Ministry of Foreign Affairs in 2024 to negotiate with the UK for asset recovery.

The UK Crown Prosecution Service (CPS) has filed a motion in the High Court to retain the Bitcoin, stating it should be sold and distributed between police forces and possibly the Treasury once legal costs and restitution are accounted for.

Read Also: Does BlackRock Prefer Ethereum Over Bitcoin?

What Could Happen to Bitcoin’s Price?

The crypto market is in the midst of a rally, with Bitcoin recently trading above $118,000. Any sudden liquidation of a $7 billion Bitcoin stack—even if done in tranches—could create major volatility and fear among investors.

Market experts fear that this move could:

• Disrupt bullish momentum
• Trigger panic selling or short-term bearish sentiment
• Invite criticism from global investors and governments

However, others argue the market is now more mature, with higher liquidity and institutional involvement capable of absorbing the sell pressure over time.

Critics Warn of Strategic Misstep

The crypto advocacy community is rallying against the Treasury’s strategy. Jordan Walker, founder of Bitcoin Collective, published an open letter to the UK government warning that selling the holdings “to address a short-term budget deficit” could jeopardize the country’s long-term crypto positioning.

Walker’s concerns include:

• Sending a signal that the UK lacks confidence in Bitcoin as a store of value
• Losing out on potential future gains if BTC continues its historical growth trajectory
• Damaging the UK’s image as a forward-thinking fintech hub

Some believe the UK should adopt a “Bitcoin reserve” strategy, retaining the asset as a sovereign hedge against inflation and geopolitical uncertainty—mirroring conversations happening in countries like El Salvador and the United States.

Is This Sale Even Legal?

Under the Proceeds of Crime Act (POCA), UK authorities are permitted to seize and sell assets obtained through criminal means. However, the law also mandates that courts consider restitution to victims, meaning not all proceeds automatically flow to the state.

As Bitcoin Policy UK’s head of policy Freddie New noted on X (formerly Twitter), any asset liquidation must adhere to a strict legal process. He emphasized that the victims “lost yuan, not Bitcoin,” adding another layer of complexity to the question of rightful ownership.

The UK High Court is expected to make a final ruling before any major liquidation begins.

Final Thoughts

The UK Treasury’s proposed $7 billion Bitcoin sale is a watershed moment in the intersection of crypto, government finance, and legal restitution. On one hand, it offers a potential revenue stream to aid national finances. On the other, it exposes the UK to backlash from the crypto community, international critics, and possibly even courts.

As legal debates play out and the market braces for possible disruption, investors should closely monitor developments. If the sale proceeds, its impact on price could be immediate—but also temporary, depending on how strategically it's managed.

Long-term, the situation highlights a broader question: should nations be selling Bitcoin… or stockpiling it?

Read Also: Can You Still Get Free Bitcoin in 2025? Here is the Way to Go

FAQs

Why is the UK Treasury selling Bitcoin?

The UK Treasury is reportedly planning to sell over $7 billion in seized Bitcoin to help reduce the national budget deficit.

Where did the Bitcoin come from?

Most of the Bitcoin was seized from a 2018 Chinese Ponzi scheme involving money laundering and criminal assets held in the UK.

Is the Bitcoin sale legal?

The sale is under review by the UK High Court, as victims and Chinese authorities are challenging ownership. Legal proceedings are still ongoing.

Could this affect the Bitcoin price?

Yes. A large sell-off could temporarily affect Bitcoin’s price, especially in a bullish market.

What’s the controversy around the sale?

Critics argue the move is short-sighted, potentially damaging the UK's crypto standing and ignoring ongoing legal and diplomatic concerns.