Chinese tech executive jailed for 14.5 years for money laundering millions via crypto; China tightens crackdown on digital asset crimes.

A former tech executive in China has been sentenced to 14 years and six months in prison. The Beijing court found him guilty of embezzling 140 million yuan (around US$19.5 million) and laundering the funds using cryptocurrency. The executive, surnamed Feng, was employed at a short video platform. He was in charge of incentive payouts.

China Warns Firms: Follow Law in Crypto Dealings

Prosecutors said that Feng worked with external vendors. They also fabricated false claims and transferred firm funds to personal accounts. He was then able to convert the stolen money to Bitcoin and other digital currencies. These were executed on eight overseas crypto-trading platforms.

The case was unique in three aspects. First, there was large-scale corruption by a person in a low level of the hierarchy. Second, it presented how illegal money was concealed with the help of virtual currencies. Third, the company lacked strong prevention of fraud systems. These are the arguments that were emphasized by Prosecutor Li Tao in the trial.

Feng was not the only one who was charged. Other people were also convicted by the court, including the key perpetrator, Wan Mouyuan. The members employed a technique in which they employed Chinese yuan (RMB) and the stablecoin USDT (Tether) to perform unlawful foreign exchange transactions and U.S. dollars. This program had a total value of more than 234 million yuan.

The significance of this case is that it contributes to the understanding of Chinese courts in regard to cryptocurrency crime. There has been a small response to this among the population, but it indicates how the Chinese government continues to crack down on crimes with digital assets. The governments are becoming apprehensive in warning that all cryptocurrency-related operations are to be carried out in line with the laws of the country.

China Sends Strong Message Against Crypto Money Laundering

Interestingly, USDT has appeared in many similar cases. It has become a common feature in cross-border crime due to the ability to conduct quick transactions without conventional banks. It is a case that enhances the investigation of the stablecoin used in the illegal exchange of money.

Bitcoins remain illegal to trade in mainland China. Moreover, the banks in the country are forbidden to work with virtual assets. But that has not deterred the criminals to use crypto to launder money. The Chinese authorities still take these problems seriously.

Meanwhile, China also finds cryptocurrencies useful in some way. As an example, the police in Beijing recently announced that they are going to put crypto seized in criminals on sale. The token will be sold on the licensed exchanges in Hong Kong where crypto is not illegal to trade. However, the implementation of this plan is being done in collaboration with the China Beijing Equity Exchange.

Related Reading: China Mulls Yuan-Backed Stablecoin via State Firms 

It is not known how many crypto the Chinese authorities have. However, in a high profile case, officials in Yancheng city seized 195,000 bitcoin as part of a Ponzi scheme in 2020. It would be valued at almost US$23.4 billion at current prices.

This new sentencing puts a strong message across. China will have no tolerance against financial crimes using cryptocurrency. The government is also trying to develop more transparent laws and tools of enforcement to govern the digital assets in future.