$9 Billion Bitcoin Seizure: Victims Seek Funds, DOJ Faces Scrutiny
The U.S. Justice Department last October announced the largest asset seizure in American history: a cache of bitcoin then valued at $15 billion tied to the Cambodia-based Prince Group, alleging the conglomerate oversaw an empire of human trafficking and industrial-scale scamming.
The news offered a rare glimmer of hope for victims of sophisticated cryptocurrency scams, who have historically faced immense difficulty recovering lost funds or even initiating law enforcement investigations due to the ease of laundering cryptocurrencies.
“By dismantling a criminal empire built on forced labor and deception, we are sending a clear message that the United States will utilize every tool at its disposal to defend victims, recover stolen assets, and bring to justice those who exploit the vulnerable for profit,” officials said in a joint statement.
But five months after the announcement, questions and frustrations are mounting regarding the Justice Department’s handling of the historic cache of seized funds. The department has offered little clarity on its plans for the 127,271 seized bitcoins, currently worth around $9 billion, and has swiftly rejected claims filed by attorneys representing hundreds of alleged victims.
Daniel Thornburgh and other attorneys representing alleged victims say the government is not providing a viable path for returning seized funds to rightful owners.
Victims’ advocates and attorneys fear the agency may use the funds to capitalize a national Strategic Bitcoin Reserve, a government crypto stockpile advocated by the cryptocurrency industry.
“This would lead to victims being revictimized by their own government,” said Thornburgh.
He is among a growing number of attorneys and victim advocates calling for a special victim fund to grab over responsibility for the seized assets, arguing it offers a clearer path to restitution.
The Department of Justice declined to comment on the case.
The U.S. Seizure of billions in bitcoin from Prince Group founder Chen Zhi stemmed from allegations that he operated a transnational criminal organization using forced labor in scam compounds to defraud victims worldwide. Chen was taken into custody in Cambodia in January 2026 and sent to China.
Questions Swirl Around U.S. Plans for Record $15B Prince Group Crypto Seizure
Even as victim attorneys strategize how to recover funds, fundamental questions remain unanswered, including how and when U.S. Authorities obtained the funds in the first place. Attorneys say more information could strengthen victims’ claims, while the Prince Group argues the lack of detail suggests a weak government case. The Justice Department has not publicly explained how it obtained the Bitcoin, but the Chinese government has accused the U.S. Of stealing it through hacking.
The government’s indictment of Chen contains apparent irregularities. Prosecutors’ evidence included photographs alleged to illustrate the Prince Group’s violent methods, but some of these images appear unrelated to the case.
One photo, presented as evidence of violence, appears to be from a Mongolian-language website post from 2020 about a man whose testicles became stuck in a lawn chair. Another photo, depicting a man with a head wound, was identified by the man himself as resulting from a drunken fight in 2015, with no connection to the Prince Group.
Victim Claims Have Been Swiftly Rejected
When government authorities seize assets, they can use them for public purposes, distribute them to victims, or a combination of both. Determining how to return assets to victims is complex and can take years.
Following the Prince Group seizure, a U.S. Senator suggested the assets could partially fund a national strategic bitcoin reserve. Simultaneously, attorneys representing alleged scam victims flooded the Justice Department with claims on the seized assets.
The department rapidly rejected many claims, citing a lack of specific evidence linking cases to the seized funds and asserting no legal basis for the claims.
Victims and their attorneys describe a Justice Department seemingly determined to deny claims. Without more information about the seizure, linking specific scams to the cache of digital currency is tricky due to the complex laundering methods employed, according to lawyers.
“What’s happening here is not normal at all,” said Marc Fitapelli, a New York-based attorney representing victims of cryptocurrency scams. “There should be an independent person appointed by the court to have control over these assets.”
Thornburgh said conversations with Justice Department lawyers convinced him the government intends to deny victim claims, prompting a trip to Cambodia to gather additional evidence. Despite interviewing former workers at scam compounds, he found it impossible to directly link his clients’ cases to the seized funds.
“It was an incredible amount of work to demonstrate what I probably already knew, which was: this was going to be impossible,” Thornburgh said. “Even if I was successful, victims or their lawyers should not have to travel all the way across the world to recover their assets.”
In a separate case, government attorneys argued that victims did not deserve to recover funds because they voluntarily transferred money to scammers, even if induced by misrepresentations. “Though their voluntary transfers may have been induced through misrepresentations, those transfers were made voluntarily nonetheless,” the Justice Department said in a filing.
Experts suggest legislation as a promising path to recovering victim funds. Erin West, founder of Operation Shamrock, an advocacy group for cyber scam victims, said the organization will push for legislation allocating the seized funds to victims. “We have an amazing opportunity to place found assets back into the hands of those who deserve it most,” West said.
Fitapelli said a recent call with Justice Department lawyers yielded few answers. “I was told that victims will be contacted by the government if/when the DOJ determines it is appropriate,” he said. “So victims should hope that some lawyer at the Justice department stumbles on their file and contacts them? This is so unfair.”
Deeper Questions About the Money
Scam victims aren’t the only ones seeking more information. Almost immediately after the seizure announcement, cryptocurrency experts questioned the origin of the bitcoin. U.S. Officials stated the Prince Group’s laundering methods diverted proceeds to a bitcoin mining company called LuBian. However, the seized bitcoin had been dormant in crypto wallets since 2020.
A blockchain is a digital ledger that stores information across a worldwide computer network. Cryptocurrency transaction data is stored in files known as “blocks,” which are saved chronologically to create a digital “chain.”
Each block has a unique identifier, or hash, which is generated by a cryptographic algorithm that also includes data from the previous blocks in the chain. Blockchains are distributed, which means copies are saved across multiple computers and must match across the network to be valid, rather than relying on a centralized third party, like a bank.
Blockchain technology is not exclusive to cryptocurrency. It can also be used to store other kinds of data, such as medical information or property records.
The Justice Department filings do not detail how it obtained the funds. This lack of explanation has fueled speculation, including a claim by a Chinese cybercrimes agency that the U.S. Government stole the bitcoin through hacking in 2020.
Chen’s attorneys have demanded the Justice Department explain how it seized the funds. The asset forfeiture filing, outlining the government’s rationale, has also raised questions about which victims may be entitled to funds.
Analysts noted the $15 billion in bitcoin had been dormant since 2020. Chen’s defense argues these dormant assets could not have been commingled with funds from scams occurring in 2021 and 2022, as described in the government’s filing.
The Prince Group argues the U.S. Government took the coins and fabricated a story to justify keeping them. “This indictment is simply air cover for a giant cash grab — one that both does a disservice to the victims of these crypto scams and injustice to an innocent man,” a spokesperson for the Prince Group said.
“Prosecutors used exaggerations, deceit, and outright impossibilities to convince a court to retroactively approve their theft of Bitcoin and to convince a grand jury of everyday Americans to indict an innocent man, Chen Zhi,” the spokesperson said. “Not only did prosecutors use salacious rumors and innuendo to make wild accusations completely unconnected to Chen, they made serious errors, generated falsehoods out of whole cloth, and acted with egregious negligence all in an effort to justify their desperate, unfounded allegations.”
The Prince Group highlighted questionable evidence in the indictment, including a photo of a man bound to a chair that originated on a Mongolian website in 2020, unrelated to the group. Another photo, depicting a man with a head wound, was identified by the man as resulting from a drunken fight in 2015.
The Department of Justice declined to comment on the photographs.