US civil action over chen zhi bitcoin seizure faces new legal challenge

Defense attorneys are pushing back against a major US asset grab linked to chen zhi bitcoin holdings, raising broader questions about cross-border enforcement in crypto cases.

Chen Zhi’s lawyers move to dismiss massive Bitcoin seizure

Lawyers for Chen Zhi, the Chinese-born businessman behind Cambodia-based Prince Holding Group, have asked a US federal court to throw out the government’s move to confiscate 127,271 BTC, according to a new report from Bloomberg. The entrepreneur has been accused of connections to global online scam networks.

In October 2025, the US Attorney’s Office for the Eastern District of New York, together with the Justice Department’s National Security Division, filed a civil forfeiture action targeting the large Bitcoin cache. The case seeks to permanently seize the cryptocurrency allegedly tied to the activities of Prince Holding Group.

Prosecutors have linked the funds to so-called pig-butchering scams and other illicit schemes allegedly tied to Chen and his Prince Holding Group operations. Moreover, US authorities describe a pattern of romance and investment fraud that they say victimized people around the world.

Defense challenges fraud and money-laundering narrative

However, Chen’s legal team argues that the US government has failed to clearly establish that the seized Bitcoin was directly derived from fraud or money-laundering offenses. They also questioned the chronology presented by prosecutors, suggesting key elements of the timeline do not withstand scrutiny.

Lawyers further contend that many of the allegations leveled against Chen are, in their words, “provably and obviously false.” That said, they did not publicly detail every disputed point, and many of the filings remain within the US federal court system.

The Bitcoin trove targeted in the civil action was initially estimated at about $14 billion when it was first identified for seizure. At that time, the position underscored the scale of alleged scam proceeds that US authorities claimed were tied to Chen and his corporate network.

Value of the seized Bitcoin falls amid market swings

Since then, cryptocurrency prices have fluctuated significantly. Following recent bitcoin market volatility, the 127,271 BTC is now valued at roughly $8.8 billion. The leading digital asset is currently trading near $69,500, reflecting an approximate 2% decline over the past 24 hours, based on on-chain data.

This shift in valuation highlights how fast-changing crypto markets can affect the scale of any eventual recovery for governments in a high-profile cryptocurrency asset seizure. However, it does not change the core legal questions around ownership and provenance of the coins.

For US prosecutors, the case has become one of the most visible examples of an international bitcoin seizure case linked to alleged online fraud. By contrast, the defense insists that the evidence chain around the addresses and flows of funds remains incomplete or misinterpreted.

Sanctions, arrest in Cambodia and extradition to China

After the US indictment was announced last October, Chen came under increased pressure from multiple jurisdictions. Moreover, both the US and the UK imposed sanctions on him, deepening official scrutiny of his activities throughout Asia.

In January 2026, authorities in Cambodia arrested Chen, revoked his local citizenship, and then extradited him to China. That move intensified international focus on the chen zhi bitcoin case and on the broader network of alleged scam operations tied to the Prince brand.

The outcome of the US civil forfeiture proceedings will likely set an important precedent for how courts handle large cross-border crypto hoards linked to alleged fraud. In summary, the dispute over 127,271 BTC now sits at the intersection of sanctions policy, criminal enforcement, and the evolving legal treatment of digital assets.