The behind-the-scenes signal of Chen Zhi's deportation to China: Can China and the US recover the 127,000 BTC?

Chen Zhi was arrested in Cambodia and deported to China. In October, the US confiscated 127,000 BTC, and in December, Cambodia revoked his nationality, granting China enforcement rights. The Phnom Penh operation on the 7th was led by Chinese authorities. Cambodia cooperated because it cannot offend both China and the US simultaneously. Chen Zhi was once granted a knighthood and had close ties with the Prime Minister’s children. Singapore froze 150 million SGD, with total assets exceeding 15 billion USD. China will pursue asset recovery and may reclaim BTC from the US.

The Legal Intricacies of Chen Zhi’s Nationality Revocation

First doubt: Who arrested Chen Zhi? Based on combined news reports and accounts from friends, Chen Zhi was detained in a luxury villa in Phnom Penh around 8 a.m. on the 7th. The arrest was carried out by Cambodian authorities, but it is revealed that this was executed under international law enforcement cooperation, with Cambodian police acting under a framework that involved cooperation with Chinese authorities, who then continued the investigation in China.

The underlying implication is: China led this transnational arrest of Chen Zhi. Since China cannot directly cross borders to arrest someone, Cambodia cooperated with China to carry out the operation. Such international law enforcement cooperation is common in transnational crime cases, but the key factor is whether the target country is willing to cooperate.

Another crucial point is that Chen Zhi renounced Chinese nationality in 2014 and acquired Cambodian nationality. In other words, theoretically, Chen Zhi is a Cambodian national. Does China have the right to arrest a foreign national? The answer is yes, and it is legal. Because last month, the Cambodian government officially revoked Chen Zhi’s nationality by royal decree.

When a person born in China becomes stateless, their nationality status is determined by China. Therefore, this action is fully justified legally. The legal design is extremely clever: first applying diplomatic pressure to revoke Chen Zhi’s Cambodian nationality, then leveraging his stateless status to claim enforcement rights. The entire process is airtight within the framework of international law.

The Three-Step Legal Process of Chen Zhi’s Deportation

Step 1 (October): The US confiscates 127,000 BTC, and Chen Zhi remains in Cambodia without fleeing.

Step 2 (December): The Cambodian king revokes Chen Zhi’s nationality, rendering him stateless.

Step 3 (January): China asserts enforcement rights; Cambodia cooperates in arresting and deporting him.

Additionally, not only Chen Zhi was deported. Two others, Xu Jiliang and Shao Jihui, were also involved. These two are core figures in the Prince Group. Currently, there is limited information online about them, but more details are expected to emerge.

Why Did Cambodia Cooperate? A Political Calculation Not to Offend

The reason for highlighting this case is because Chen Zhi was a highly influential figure in Cambodia, even granted a knighthood by Hun Sen in 2020. Moreover, Chen Zhi was on friendly terms with Prime Minister’s son Hong Manei and Hong Meni, freely moving in and out of the Prime Minister’s residence. Yet, in October, his 127,000 BTC was taken by the US.

The US, Cambodia cannot afford to offend. But what about China? Can Cambodia afford to offend China? If you are the Cambodian authorities, would you risk offending China for Chen Zhi? The answer is clear. In this dilemma, Cambodia chose to cooperate with China rather than protect Chen Zhi, reflecting the reality of geopolitical interests. China is Cambodia’s largest investor and aid provider, with high economic dependence. Offending China over a criminal wanted by the US would cost far more than the political benefit of protecting Chen Zhi.

This also clarifies a previous mystery: many speculated that after the US seized Chen Zhi’s BTC, he might flee abroad. In reality, he remained in Cambodia, as it’s still somewhat respectable there—unlike Maduro, who is less so. Chen Zhi chose to stay in Cambodia perhaps because he believed his connections with Cambodia’s political and business elites could offer protection, but he underestimated China’s diplomatic pressure.

Why Does China Want to Arrest Chen Zhi? Three Strategic Goals

Why does China want to arrest Chen Zhi? This is the deepest hidden agenda and the most crucial part of the entire event. First, it must be clarified that China’s determination and attitude against telecom fraud have never wavered. The national level is very aware of how damaging these fraud camps are domestically, as evidenced by the crackdown in northern Myanmar. The Ministry of Public Security’s iron fist remains unrelenting.

The first goal is to eradicate the entire telecom fraud industry. By capturing Chen Zhi and his core team (Xu Jiliang, Shao Jihui), China aims to completely dismantle the Prince Group’s operations in Cambodia. This benefits the country and its people. The second goal is to recover assets and compensate victims. Although 127,000 BTC was confiscated, it’s likely only part of the total assets. By the end of October, Singapore froze assets worth over 150 million SGD. Chen Zhi has been involved in telecom fraud for many years, with assets far exceeding 15 billion USD. Reclaiming these assets would allow China to compensate domestic victims.

The third goal is to reclaim BTC from the US. Although Bitcoin is now under US jurisdiction, it does not necessarily belong to the US forever. If China can prove that Chen Zhi’s illegal proceeds came from scams targeting Chinese residents, then the US should return the BTC to China. If the US believes some of the BTC belongs to them, they can request and provide evidence, but they cannot claim all 127,000 BTC. Similar to how the UK confiscated 60,000 BTC from Money Zhi Min, the UK police are already negotiating with China. The same logic applies to Chen Zhi’s 127,000 BTC. This is why Chen Zhi must be brought to justice and deported back to China.