Malaysia Court Says Wallet Transfers Do Not Erase Bitcoin Ownership Claims

A Malaysian High Court ruled that Bitcoin moved through intermediary wallets can still be subject to ownership claims, addressing victims’ efforts to recover assets seized in the Bitkingdom scheme.

The Oct. 12 ruling concerned 497.82 Bitcoin (BTC) seized in connection with the scheme and claims by nine investors. The court ordered a proportional return to the claimants. They had deposited a combined 362.04 BTC into Bitkingdom between 2015 and 2016.

Justice Mohd Arief Emran Arifin rejected the prosecution’s argument that transfers between wallets and the mixing of digital assets prevented the claimants from establishing an interest in the seized Bitcoin. The court found that the wallet movements did not, by themselves, end the ownership claims.

Bitkingdom promised daily returns of about 1%, and the court found the nine claimants had been deceived into making deposits. Investors filed 207 police reports alleging losses of about 1,023 BTC. Those reported losses exceeded the amount seized, so the order provided for proportional recovery rather than full repayment of deposits.

A Dec. 23, 2025, ruling classified the cryptocurrency as proceeds of unlawful activity tied to cheating under Section 420 of Malaysia’s Penal Code. The Oct. 12 order applied Malaysia’s Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001.