The UK government is reportedly preparing to sell over $7 billion worth of seized Bitcoin to address its growing budget deficit, igniting legal and diplomatic controversy. According to a report from The Telegraph, the Home Office and Treasury are working with police to establish a system to liquidate the crypto, primarily from a stash seized during a 2018 Chinese Ponzi scheme bust. The pile includes at least 61,000 Bitcoin, valued at roughly $7.1 billion.

While UK law enforcement typically handles crypto seizures, the Treasury’s involvement is notable amid Bitcoin’s recent price surge. However, the move faces major opposition. Victims of the original Ponzi scheme—run by Tianjin Lantian Gerui Electronic Technology—have called on the UK to return the Bitcoin. The scheme’s proceeds were laundered by Jian Wen, who was convicted of money laundering and sentenced in May 2024.

Susie Violet Ward, CEO of Bitcoin Policy UK, criticized the plan, calling it “sensationalism over substance.” She emphasized that the Bitcoin is still under legal dispute, and no sale can happen until that is resolved. China’s Foreign Affairs Ministry has been asked to negotiate the asset’s return.

Despite the backlash, the Crown Prosecution Service has petitioned the High Court to retain the Bitcoin under proceeds of crime laws, which allow asset sales to satisfy confiscation orders and compensate victims. Bitcoin Policy UK’s Freddie New noted that any leftover funds could go to the Treasury and police agencies.

Calls to stockpile, rather than sell, the Bitcoin continue. Crypto advocates argue that dumping the holdings could hurt the UK’s long-term economic strategy and send negative signals about its stance on digital assets.