Cryptocurrency

The Fate of $14 Billion in Bitcoin Seized by the U.S. from Cambodian Fraud Kingpin Chen Zhi

Following the U.S. seizure of over $14 billion in Bitcoin from Cambodian fraud mastermind Chen Zhi, a critical question emerges: will these funds be returned to the victims or absorbed into strategic reserves?

Administrator

22 October, 2025

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The U.S. Department of Justice (DOJ) has announced the seizure of 127,271 Bitcoins (over $14 billion in market value), allegedly derived from global fraud and money laundering schemes orchestrated by Chen Zhi, Chairman of Cambodia’s Prince Group. This marks the largest Bitcoin seizure in DOJ history, raising significant legal and political questions.

From Chen Zhi’s Case to America’s ‘National Bitcoin Reserve’

According to court documents, Chen Zhi and his network are accused of operating “forced labor camps” to execute global cryptocurrency investment scams, defrauding tens of thousands of victims out of billions of dollars.

Alongside criminal charges for wire fraud and money laundering, the U.S. government is seeking to confiscate all Bitcoin proceeds.

The critical question remains: if successful, will these Bitcoins be added to the ‘Strategic Bitcoin Reserve’ announced by President Donald Trump in March 2025, or used to compensate victims?

Chen Zhi is accused of running a large-scale cryptocurrency fraud scheme under the guise of a diversified company. Image: Coinfomania

The U.S. Department of the Treasury, which oversees national digital assets, has yet to comment on the allocation of the seized funds.

Divided Opinions Among U.S. Politicians

Senator Cynthia Lummis (R-Wyoming), a staunch Bitcoin advocate, stated, “Transforming illicit assets into resources that strengthen the Strategic Bitcoin Reserve demonstrates sound policy, turning wrongdoing into long-term national value.”

Lummis also urged Congress to enact legislation clarifying the storage and return of seized cryptocurrencies.

Scott Johnsson, a financial attorney and cryptocurrency venture capitalist, predicts the U.S. government will retain a significant portion of the Bitcoin, with the remainder returned to victims.

However, victim verification and asset redistribution could take years due to the complexity of the transnational money laundering network.

“This is the most intricate illicit asset seizure we can imagine,” he commented on X.

Former federal prosecutor and Treasury official Ari Redbord noted it’s uncertain how much of the seized Bitcoin will be allocated to the reserve versus victim compensation.

If most is retained, America’s national Bitcoin reserve will surge, solidifying cryptocurrency’s role in national financial strategy.

If prioritized for victim restitution, it would be one of the largest financial returns in modern history.

Could the U.S. Hold Over $36 Billion in Bitcoin?

According to blockchain analytics firm Arkham Intelligence, the U.S. government currently controls wallets containing approximately $22 billion in Bitcoin.

If Chen Zhi’s Bitcoin is added to the reserve, the total value of U.S.-controlled Bitcoin could exceed $36 billion, cementing America’s position as the world’s largest Bitcoin holder.

In March, President Trump signed an executive order directing the Treasury and the White House Cryptocurrency Task Force to assess the government’s Bitcoin holdings and evaluate investment strategies for a ‘National Strategic Bitcoin Reserve.’

However, the White House’s July report did not disclose details about the actual Bitcoin holdings. The Treasury has not responded to Decrypt’s requests for comment.

Du Lam (Source: Decrypt)

– 15:28 20/10/2025