US court denies claims to 127,271 seized Bitcoin by fraud victims

Judge Rachel P. Kovner rejected nine claims from alleged fraud victims contesting the forfeiture of approximately 127,271 Bitcoin in a ruling on Sept. 25. The claimants failed to connect their lost funds to the specific seized wallets, which limits their recovery options if the government prevails in the forfeiture case. The judge dismissed timely claims from Ath Leepinyo and Connie Wilson and denied late filings from seven others, citing a lack of Article III standing necessary to contest the forfeiture. The civil forfeiture complaint was initiated on Oct. 14, 2025, by the DOJ, linking the Bitcoin to fraud and money laundering allegations involving Prince Holding Group and its chairman, Chen Zhi. The court determined that the claimants' allegations only established their status as general unsecured creditors without a qualifying interest in the forfeited assets. Although a constructive trust could potentially grant equitable ownership, none of the claimants demonstrated a plausible connection between their funds and the seized Bitcoin. The ruling allows for potential victim remission if the government successfully forfeits the Bitcoin, enabling eligible victims to petition for recovery from the forfeited property, provided they meet specific criteria.

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