Chinese man sentenced to 11 years for stealing 107 BTC via memorized seed phrase

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Chinese man sentenced to 11 years

Theft of the assets

While setting up the wallet, Feng wrote down the 12-word seed phrase required to recover access to the funds. Investigators found that Zhang managed to memorize 11 of the 12 words and later guessed the final word, allowing him to regain control of the wallet.

He subsequently transferred 107 BTC to addresses under his control.

The Licang District People’s Court concluded that Zhang also converted part of the stolen assets and obtained more than $97,000 in proceeds. In addition to the prison sentence, the court imposed a fine of 100,000 yuan, or roughly $14,700.

Funds traced through blockchain

After discovering the missing Bitcoin, Feng reported the theft to authorities. Investigators analyzed blockchain transaction records and other digital evidence that ultimately linked the transfers to Zhang.

During the proceedings, Zhang admitted to moving the funds but claimed he had only intended to “protect” the assets and had no intention of enriching himself. He said the funds were later lost through unsuccessful cryptocurrency trading.

Prosecutors rejected that explanation, arguing that electronic evidence demonstrated unauthorized control of the assets and profits generated through their sale.

Bitget Wallet COO Alvin Kan said the case highlights the importance of human factors in cryptocurrency security. According to Kan, users often focus on protecting their devices while underestimating the risks associated with wallet creation and seed phrase handling.

Crypto crime and prison sentences

The case is the latest example of courts imposing significant prison terms for crimes involving digital assets.

Despite China's restrictions on cryptocurrency trading, prosecutors noted that Bitcoin can still be treated as property under Chinese law and therefore may qualify as the subject of theft offenses.

In May 2026, the U.S. Department of Justice charged three Tennessee residents in connection with a series of armed robberies targeting cryptocurrency businesses in California. Prosecutors alleged the suspects stole both cash and digital assets from business owners.

Separately, a U.S. court sentenced a man to 20 years in prison in February for orchestrating a cryptocurrency fraud scheme worth approximately $74 million. Authorities said he misled investors and used the funds for personal expenses.

Earlier, two men in the United States were sentenced to prison for their roles in a scheme involving North Korean IT workers.

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