Judge Rachel P. Kovner of the US District Court for the Eastern District of New York has struck down claims by nine alleged fraud victims seeking to contest the civil forfeiture of approximately 127,271 Bitcoin, ruling in a Sept. 25 order that none of them established Article III standing to intervene in the case.

The order struck the timely-filed claims of Ath Leepinyo and Connie Wilson and denied seven other claimants permission to file late. All nine failed to plausibly connect their lost funds to the specific seized wallets, the court found, leaving them with a different recovery route if the government prevails in the forfeiture action.

The case stems from a civil forfeiture complaint filed on Oct. 14, 2025. The Department of Justice said at the time that the Bitcoin was already in US custody and alleged links to fraud and money laundering involving Prince Holding Group, a Cambodian conglomerate, and its chairman, Chen Zhi. DOJ has separately indicted Chen in connection with what it described as Cambodian forced-labor scam compounds.

Kovner's ruling turns on a narrow but consequential legal distinction. The court treated the claimants' allegations as establishing, at most, the status of general unsecured creditors — parties seeking compensation without a qualifying interest in the particular assets subject to forfeiture. A loss tied to an alleged fraud scheme, the judge reasoned, does not establish ownership of coins held in the specific wallets the government seized.

The order acknowledged one viable path to standing: a constructive trust. That equitable remedy can recognize a claimant's interest in property derived from another person's assets. But the court found that none of the nine claimants plausibly alleged the necessary connection between their funds and the seized Bitcoin.

The case of Lawrence D. Van Dyn Hoven illustrates the evidentiary bar. His filing relied on an investigator's belief that his stolen cryptocurrency formed part of the seizure. Kovner found the submission offered no supporting facts explaining that belief, and the claim failed accordingly.

The remission alternative

Kovner pointed the claimants toward victim remission, a DOJ-administered process available if the government succeeds in forfeiting the Bitcoin. Remission allows eligible victims to petition for recovery from forfeited property even without a present ownership interest in it.

The procedural requirements are demanding. Under 28 CFR 9.8, petitioners must document a specific financial loss directly caused by the offense underlying the forfeiture or a related offense. They must also show no knowing participation in or benefit from the offense, no willful blindness, that they have not already been compensated for the loss, and that no reasonably available alternative assets exist for recovery.

Even eligibility carries no guarantee of full repayment. When forfeited property cannot cover petitions in full, recognized victims receive proportionate shares, and remission is capped at each victim's share of the associated net forfeiture proceeds. The sheer size of the Bitcoin seizure — roughly 127,271 coins — is therefore no promise of complete restitution.

The Sept. 25 order resolves only the nine claimants' standing. It does not finalize the forfeiture itself, nor does it transfer the assets to any reserve. Their potential recovery now depends on two sequential outcomes: the government's success in the underlying forfeiture action against the Prince Holding Group-linked assets, and a separate discretionary DOJ decision on each documented-loss petition.

The ruling signals to future claimants in large crypto forfeiture cases that tracing-based evidence, not general allegations of victimhood, will determine access to the judicial process — a standard that may narrow the field of intervenors as the EDNY forfeiture action proceeds toward resolution.