The Context
US$15 billion in bitcoin sits in US custody. The individual at the centre of the associated fraud, Chen Zhi, was extradited from Cambodia to China in January 2026. The US Department of Justice unsealed its indictment in October 2025, alleging a global fraud scheme generating an estimated US$30 million daily through online gambling and ‘pig butchering’ scams. The operation was masked by Prince Holding Group, a legitimate-seeming conglomerate that donated US$3 million for COVID-19 vaccines and ran a US$2 million scholarship programme. Chen held five passports and was a personal adviser to Cambodia’s Prime Minister.
The Risk
The strategic risk is not the crime, but the extradition path. A US indictment for defrauding Americans was superseded by a Chinese extradition. This creates a $15bn governance black hole for victims. For a New Zealand director, this jurisdictional arbitrage translates to direct liability. If your company’s third-party partners, supply chain, or joint ventures operate across such jurisdictions, you face an unquantifiable financial exposure. The audit trail vanishes at the border. Under the Companies Act 1993, directors have a duty to act in good faith and in the best interests of the company. Failing to identify and mitigate a known, material jurisdictional risk where funds or assets could be seized or litigation frustrated may indicate a failure of that duty. The financial loss is absolute.
The Control
Treat jurisdiction as a financial variable. Map all material contracts, asset holdings, and key personnel against a matrix of extradition treaties, enforcement cooperation, and political exposure. Assign a risk-weighted value to each jurisdiction, factoring in the probability of a rival claim like China’s in this case. This is not a legal exercise; it is a balance sheet protection strategy. The value at risk must be on the board’s register.
The Challenge
These are the critical questions you should be raising at the board table:
| What is the total dollar value of our assets, contracts, and receivables currently exposed to jurisdictions with weak or politically mutable extradition frameworks? | |
| Does our due diligence on major partners and investments include a forensic analysis of beneficial ownership and passport portfolios to identify Chen Zhi-style jurisdictional firewalls? | |
| If a counterparty were subject to a multi-jurisdictional claim, what is our quantified risk of total loss, and what specific financial provision have we made for it? |