In a London courtroom in September, wearing a brown cardigan and animal print top, 47-year old Zhimin Qian, aka “BitQueen”, pleaded guilty to her role in one of the biggest cryptocurrency frauds in history. Qian, also known as Yadi Zhang, fled China in 2017 after ripping off 128,000 investors and converting their cash into bitcoin.
At the time, the haul was worth £1.4bn. Today, its value has soared past £5.5bn. Qian has now been sentenced to 11 years and eight months in prison, and now begins a long battle in the High Court over who is entitled to the fortune - the UK government or the thousands of Chinese victims.
The case hit the headlines, but is far from being the only one in the Wild West of crypto finance. The National Crime Agency estimates that criminal crypto transactions in the UK likely exceeded £1.2bn in 2021. Crypto kidnappings have become a huge problem in Europe, with French police arresting more than 20 people this summer who were accused of a number of plots targeting cryptocurrency entrepreneurs and their families. And just a few years ago, another major scandal made headlines around the world: the case of Ruja Ignatova, dubbed ‘The Missing Cryptoqueen’, who orchestrated the $4.5bn OneCoin fraud. Founded in Bulgaria in 2014, OneCoin posed as a legitimate cryptocurrency but was a pyramid scheme in disguise. Ignatova is on the run — she has not been seen since she stepped off a Ryanair flight in Athens over six years ago.
But what is crypto crime and how do you “steal” money that doesn’t physically exist?
The Met Police explain that “cryptoassets”, also referred to as “cryptocurrency”, “tokens” or “coins”, are “digital representations of value or rights which can be stored, transferred and traded, often using distributed ledger technology”. There are thousands of “coins” in existence; the most well known are bitcoin, Ethereum and Ripple, and they all use cryptography (the practice of protecting information through encryption and decryption) to secure communications and transactions.
While BitQueen hit the headlines for the vast sums involved, cryptocurrency-related crimes vary from the small (hacking a victim’s phone) to high-profile cases where terrorists use crypto to fund their operations, former presidents are targeted for hacking and kidnappings are rife.
Originally conceived as a decentralised financial system, cryptocurrency was embraced by libertarians for its ability to keep assets and transactions beyond the reach of state control. Its use in money laundering surged during the Covid pandemic, when global travel restrictions made it harder to move cash physically.
Over the past few years, cryptocurrency has also become a hotbed for fraudsters. In 2024, Action Fraud received 25,843 reports related to investment fraud, with victims losing £649m collectively. It is now the most common asset fraudsters claimed to be investing in, accounting for 66 per cent of all reports — a 16 per cent rise from the previous year.
The allure of crypto for crooks
Why has it become so attractive to criminals? There are a number of factors. Bitcoin offers pseudonymity, as so-called wallet holders don’t need to reveal personal identities. Transactions are recorded on a public blockchain, a sort of digital ledger, which allows anyone to participate. Head to what’s known as a “blockchain explorer” and you can find a watertight record of all bitcoin transactions processed since the cryptocurrency’s launch in 2009.
In theory, that means it is transparent. However, in practice criminals can use certain techniques to obscure their transactions, and mask both the source and destination of funds. One method is to use a “tumbler”, which mixes bitcoins in private pools before sending the coins to the designated recipients.
Although money laundering through crypto mimics traditional methods, there’s one key difference: speed and scale. “You’re talking about hundreds of thousands of victims in [Qian’s] scam. That’s a huge number of victims to deal with in terms of money,” says Geoff White, author of Rinsed: From Cartels to Crypto: How the Tech Industry Washes Money for the World’s Deadliest Crooks.
Unlike banks, crypto platforms often let users move money quickly and anonymously, making laundering far easier
Unlike banks, crypto platforms often let users move money quickly and anonymously, making laundering far easier. It is also a lighthouse for scammers offering “get rich quick” crypto investments, which are run through fake websites. Victims are tricked into handing over personal details like credit card information and driving licences to open trading accounts. The amounts start small. But after an initial deposit, and once the victims are hooked in, fraudsters convince them to invest more to achieve higher returns, before vanishing.
So why would someone wish to invest in a digital asset that has no central bank or authority? “People’s trust in institutions is very low. They’re more comfortable in putting their trust in a private crypto coin,” says Rupert Small, founder of tech start-up Egregious, an analysis platform which protects the online world from AI deception.
“Even with bitcoin, we still don’t know the identity of the person who created it. But people are still willing to trust it more than their state. They don’t see their government as a good custodian of their currency. There’s a contest for trust at the moment. In crypto more people competing for your trust means maybe one of them is going to be trustworthy.”
However, while the crypto system grows and grows, traditional policing has been unable to keep up, often only catching fraudsters when they make real-world mistakes. The story of how the BitQueen evaded capture is the perfect example. How did it take the police seven years to pin her down? The answer is not in crypto-intelligence — the best place to catch fraudsters is outside the digital world.
According to UK court documents from the trial of her British-based assistant, Jian Wen, Qian’s “Electronic Technology” company sold investment products promising returns of up to 300 per cent and claimed a side business in bitcoin mining. Qian funnelled investors’ money into a crypto exchange, converted it into bitcoin, and fled shortly after Chinese authorities launched an investigation. Police first raided Qian’s £5m rented mansion near Hampstead Heath in October 2018, but by then she had disappeared, managing to evade capture by using multiple identities. It took another two and a half years to trace the digital wallets containing more than 61,000 bitcoins. Qian was eventually arrested in York in April 2024 after years on the run, with police bodycam footage revealing she was apprehended while in bed.
“[Qian] wasn’t caught because of some intelligence that someone found on the blockchain,” says Small. “Criminals know they’re being hunted online. Ultimately, you have to keep looking for where they make mistakes. And often it’s only in the real world.”
In Qian’s case, it all unravelled when police investigated a botched property purchase by Wen, who was subsequently convicted of money laundering with another accomplice.
Currently, scams make up the majority of criminal transactions involving digital assets. In 2020, hackers hijacked high-profile Twitter accounts including Joe Biden, Elon Musk, Jeff Bezos, and Bill Gates to fool people out of bitcoin.
“I am giving back to the community! All bitcoin sent to the address below will be sent back doubled! If you send $1,000, I will send back $2,000,” read one tweet from Biden’s account.
Furthermore, crypto has played a role in global conflicts. While still minor compared to traditional money, terrorist groups like Hamas and the Houthis have increasingly relied on crypto to bypass banking sanctions.
Another growing threat is ransomware. In 2020 alone, hackers extorted at least $350m in crypto from companies after seizing their data or systems. These ransoms are difficult to trace due to the decentralised and pseudonymous nature of crypto. In some cases, however, this has escalated beyond digital blackmail into terrifying real-world violence over the past 20 months, with at least 231 physical incidents worldwide.
Kidnaps and severed fingers
In France, authorities have recorded a spate of kidnappings where victims are abducted and tortured until they transfer their digital wallets. This summer, police arrested Badiss Mohamed Amide Bajjou, accused of masterminding the €10m ransom kidnapping of David Balland, co-founder of crypto firm Ledger, and his wife. Bajjou is also linked to the attempted abduction of a crypto CEO’s pregnant daughter and a separate case in May involving another businessman’s finger being chopped off.
Meanwhile in the US, crypto investor John Woeltz has been indicted for torturing an Italian tourist in a luxury apartment in New York for more than two weeks. Woeltz allegedly beat the victim, used electric shock and hanged him off a ledge after he refused to provide his bitcoin password.
So what is being done globally to combat the rise in crypto frauds? In 2024, the UK government expanded powers for the National Crime Agency and police to seize, freeze and destroy illicit crypto assets. And in the US, the Treasury imposed its first sanctions on a crypto exchange in 2021 for enabling ransomware payments.
“Criminals know that it’s difficult for law enforcement to work across borders”
Authorities are now working with the private sector to trace crypto through blockchain analysis. In 2021, for instance, investigators recovered a large portion of the ransom paid to Russian hackers behind the Colonial Pipeline cyberattack.
But as technology becomes more advanced, so do criminals’ methods. There are jurisdictional hurdles too, particularly as crypto networks can spread across the globe at lightning speed. “The criminals know that it’s difficult for law enforcement to work across borders”, says Geoff White. “That’s why they’ll often base themselves in multiple countries.”
A seized bitcoin windfall
Sometimes, UK police don’t even need to go through foreign authorities; they can approach private firms directly for assistance in tracing stolen assets, says White. In Qian’s case, her bitcoin stash is now the subject of a complex legal battle that could take years to resolve. Her lawyer told the court that Qian’s conviction could bring “some comfort to investors” waiting for compensation, and “the significant rise in cryptocurrency values means there are more than sufficient funds available to repay their losses”.
Insiders believe that the seizure could present a windfall for Britain. Between Qian’s wallets and preexisting holdings, the UK might have a bitcoin stockpile that rivals the US.
Yet many of Qian’s victims are Chinese citizens seeking not just their original investment but also the profits, arguing their stolen property should be returned at its current value. The argument is likely to be that as the victims are based in China, the UK may not be legally obliged to return the full value.
“A police car, a baton and a notebook are not going to cut it anymore”
Experts warn that this case is an exception rather than the rule. Most crypto scams are never discovered and the chances of people ever getting their money back are extremely rare. If a transaction was done via bank transfer, some funds can be reversible. But sophisticated fraudsters often quickly move funds offshore to evade detection.
Despite record-breaking seizures, updated laws and improved blockchain forensics, Qian’s story is a stark reminder that in the world of crypto crime, the technology often moves faster than the law, and criminals are always one step ahead.
For every victory by the police, there’s another loophole to exploit, another jurisdiction for criminals to vanish into.
“In the future, you’re going to need new tools,” says Rupert Small. “A police car, a baton and a notebook are not going to cut it anymore. You’re going to need new applications and tools. What it takes to catch crime these days is becoming very sophisticated and complicated.”
