WASHINGTON — Five months after the U.S. Justice Department announced the seizure of approximately $15 billion in bitcoin – the largest forfeiture in its history – linked to a Cambodia-based criminal enterprise, the fate of the funds remains uncertain, and victims of the alleged fraud are facing significant hurdles in their attempts to recover lost assets. The seized cryptocurrency was tied to the Prince Group, led by Cambodian national Chen Zhi, who prosecutors allege oversaw a network of forced labor compounds and sophisticated “pig butchering” scams that defrauded victims worldwide.
While the seizure offered a glimmer of hope for those who lost savings to the complex cryptocurrency schemes, the Justice Department has provided little clarity on how it intends to utilize the 127,271 bitcoins, currently valued around $9 billion. Attorneys representing hundreds of alleged victims report that claims for restitution have been swiftly rejected, raising concerns that the funds may be diverted to other government initiatives, such as a proposed national Strategic Bitcoin Reserve.
“This would lead to victims being revictimized by their own government,” said Daniel Thornburgh, an attorney representing numerous alleged scam victims. He is among a growing number of legal advocates calling for the establishment of a special victim fund to manage the seized assets and ensure a clearer path to restitution. The Department of Justice declined to comment on the case.
The difficulties faced by victims echo findings from a November report by the International Consortium of Investigative Journalists (ICIJ), which detailed the immense challenges cryptocurrency scam victims encounter when attempting to recover stolen funds. The Coin Laundry investigation revealed how criminals rapidly launder illicit gains through secretive crypto wallets, often leaving law enforcement with little recourse.
The U.S. Government’s case against Chen Zhi alleges he operated a transnational criminal organization that employed forced labor in scam compounds across Cambodia to defraud victims globally. Following U.S. And U.K. Sanctions, Chen was taken into custody in Cambodia in January 2026 and extradited to China.
Beyond the immediate question of restitution, fundamental questions persist regarding the seizure itself, including how and when U.S. Authorities obtained the bitcoin. Attorneys argue that greater transparency could strengthen victims’ claims, while the Prince Group contends the lack of detail undermines the government’s case. Although the Justice Department has not commented on the acquisition of the funds, the Chinese government has accused the U.S. Of obtaining the bitcoin through sophisticated hacking.
Adding to the complexity, the government’s indictment against Chen contains apparent irregularities. The ICIJ confirmed that a photograph presented by prosecutors as evidence of the Prince Group’s violence actually originated from a Mongolian-language website in 2020, depicting a man receiving medical attention after an unusual accident. In another instance, a man identified in the indictment as a victim of the Prince Group told ICIJ he had never been subjected to organized crime.
The process of asset forfeiture allows governments to use seized funds for public purposes, distribute them to victims, or a combination of both. However, the Justice Department has rapidly rejected many claims, citing a lack of specific evidence linking victims’ cases to the seized funds and asserting a lack of legal basis for their claims.
“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 recently returned from a trip to Cambodia, where he interviewed former workers at the scam compounds in an attempt to gather additional evidence. He found it nearly impossible to directly link his clients’ cases to the seized funds, highlighting the logistical challenges victims face. He expressed concern over the Justice Department’s approach, citing a recent case where government attorneys argued that victims were not entitled to recover funds because they had “freely given it away” to scammers, even if induced by misrepresentations.
Experts suggest that legislative action may be the most promising path to recovering victim funds. Erin West, founder of Operation Shamrock, an advocacy group for cyber scam victims, stated the organization is working with partners to push for legislation allocating the seized funds to those harmed.
The origin of the seized bitcoin itself remains a point of contention. Cryptocurrency analysts have noted that the substantial sum had been dormant in crypto wallets since 2020, after reportedly being stolen by an unknown hacker. The U.S. Government’s asset forfeiture filing does not detail how it came into possession of the funds, fueling speculation. The Prince Group argues that the U.S. Government seized the coins and then constructed a narrative to justify retaining them, calling the indictment “air cover for a giant cash grab.”
The Prince Group’s lawyers have also questioned the use of alleged crimes occurring in 2021 and 2022 – after the bitcoin went dormant – to justify seizing funds that had been out of circulation for years.
As the legal battles continue and the fate of the seized bitcoin hangs in the balance, victims remain hopeful that they will receive some form of restitution. However, with the Justice Department remaining tight-lipped and the complexities of tracing illicit cryptocurrency transactions, the path to recovery remains fraught with uncertainty.
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