Beijing exec jailed 14 years for $19.5m crypto laundering

People’s Daily reports that a Chinese tech executive has been sentenced to 14 years in prison for orchestrating a 140 million yuan ($19.5 million) embezzlement and cryptocurrency laundering scheme.

The Haidian District People’s Court in Beijing handed down the verdict after prosecutors detailed how Feng, a former senior official at a major short video platform, abused his position to reroute company incentives through a network of shell firms and offshore exchanges.

Eight people were convicted in total, with the group accused of turning internal policy loopholes into a full-scale crypto laundering operation using coin mixing services and eight foreign platforms.

Reward loophole exploited

Feng was found guilty of occupational embezzlement, along with seven co-defendants, for his role in manipulating the company’s incentive programme designed to reward new service providers and content operators.

Between 2023 and 2024, he reportedly embedded vulnerabilities in newly crafted reward policies.

These weaknesses were shared with outside collaborators Tang and Yang, who used the information to submit fraudulent applications that triggered incentive payouts.

Together, the trio instructed others to create and register multiple shell firms whose only function was to receive and redirect company subsidies.

Yang’s subordinate, identified as Wang, was tasked with setting up these dummy entities.

Once the funds were received, they were layered through different business structures before being funnelled into controlled accounts.

Bitcoin used to hide funds

The fraud escalated into an international laundering operation. Prosecutors revealed that the 140 million yuan was converted into various cryptocurrencies, including Bitcoin, using eight offshore virtual asset exchanges.

This move was intended to erase the financial trail by making traditional tracking methods ineffective.

Advanced mixing tools were deployed to break transaction paths, further complicating the traceability of the funds.

These services scrambled the origin and movement of assets, providing a cover for the illegal activity and enabling the conspirators to claim ignorance of fund sources.

Over time, some of the digital assets were reconverted into yuan through backdoor channels and transferred into both individual and corporate accounts tied to the primary suspects.

The use of mixers allowed the group to operate under the radar until prosecutors reconstructed the financial flow using electronic data analysis.

90 BTC recovered

The investigation, led by Li Tao of the Haidian District People’s Procuratorate’s Science and Technology Crime Prosecution Team, uncovered the digital trail and led to the recovery of more than 90 bitcoins.

Facing extensive digital evidence, the group was forced to forfeit the funds, allowing the company to recoup a portion of its losses.

The court imposed prison sentences ranging from three to 14.5 years on all eight defendants, with Feng receiving the longest term.

The judgment closed one of the most complex corporate crypto laundering cases seen in Beijing to date.

Global crypto crimes rising

The Beijing case follows several international crypto-linked money laundering crackdowns.

China recently broke up a $136 million cross-border operation spanning 10 provinces. In Brazil, hackers stole $180 million from banks and converted the money into Bitcoin and USDT.

Meanwhile, in the US, Russian national Iurii Gugnin was indicted for a $530 million scheme that used his platform Evita to channel illicit funds through American banks and crypto platforms.

Global regulators are now considering bans on cryptocurrency mixers due to their role in enabling anonymous fund movements.

However, technical enforcement remains an obstacle, as backend services like eXch persist despite front-end takedowns.

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