The High Court in Kuala Lumpur has ordered the Malaysian government to return about 176 bitcoin, now worth around US$14.3 million, to nine victims of a cryptocurrency investment scam.
The coins are part of 497.82 bitcoins, valued at $17.64 million as of Nov. 1, 2023, that authorities seized from two digital wallets in the scam operation, the New Straits Times reported. At about $81,400 per coin on Oct. 20, the whole haul is worth around $40.5 million.
The nine deposited a total of 362.04 bitcoin into the scheme, Bitkingdom, between 2015 and 2016. A single bitcoin traded below $1,000 throughout that period, according to CoinDesk's price index.
But Justice Mohd Arief Emran Arifin said in his grounds of judgment, dated Oct. 12, that they were not entitled to recover the full amount because the losses of all Bitkingdom investors exceeded what the authorities had seized. The court was told investors had lodged 207 police reports over losses totaling about 1,023 bitcoin.
Arief ruled that the nine were entitled to a proportionate share of about 176.18 bitcoin. The rest, estimated at 321.64 bitcoin and now worth some $26.2 million, is to be forfeited to the government under the country's anti-money laundering law.
Each of the nine will receive between 0.68% and 11.7% of the seized bitcoin, in proportion to what they deposited, Free Malaysia Today reported.
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Bitcoin tokens next to a judge’s gavel. Illustration photo by Kanchanara/Unsplash |
The judge found the nine had proven they were deceived into depositing their bitcoin into Bitkingdom, which promised daily returns of about 1%. The coins were then moved through several intermediary wallets before ending up in the wallets belonging to Mohammad Fadino Khairuman and Arsyan Ismail.
Arief said those transfers, described as a "layering process," did not extinguish the victims' ownership rights.
"The claimants did not lend their bitcoins to the respondents, and they are not asserting a debt," he said, adding that they were saying the bitcoin had been obtained from them by cheating and was still theirs.
"Where property is obtained by fraud, the law does not treat the fraudster as acquiring a clean title to it as against the person defrauded," he said.
He rejected the prosecution's argument that the claimants could not establish a legitimate legal interest in the bitcoin because it had passed through several wallets and been mixed with other digital assets. Accepting that argument, he said, would effectively let fraudsters deprive victims of their property by laundering the proceeds of their crimes.
The judge also found insufficient evidence that the claimants had taken part in or colluded in the cheating or money laundering, and ruled that all nine had a legitimate legal interest in the seized cryptocurrency.
On Dec. 23, 2025, the High Court ruled that the seized cryptocurrency was the proceeds of unlawful activities involving cheating under Section 420 of Malaysia's Penal Code through the Bitkingdom investment platform.
Lawyers M. Athimulan, Nur Ainnabila Rosdi and Nur Nabila Roslee represented the nine, while deputy public prosecutor Anas Mahadzir appeared for the government.