- Former tech executive sentenced to 14+ years for embezzling $19.5M via crypto.
- Feng used crypto mixers and 8 crypto platforms to hide funds before converting to yuan.
- Beijing authorities order the surrender of 90 hidden bitcoins worth over $11 million.
Chinese authorities have detailed a major cryptocurrency money laundering operation involving a former technology executive who embezzled 140 million yuan ($19.5 million) from his employer. The Beijing Haidian People’s Procuratorate revealed how the defendant used eight overseas virtual currency platforms to convert stolen funds into bitcoin and other digital assets.
The executive, identified by surname Feng, used coin mixing strategies to hide the origin of laundered money before converting portions back to yuan for mainland bank transfers. According to SCMP, prosecutor Li Tao from the hi-tech crime division reconstructed the complete embezzlement and laundering process to build criminal charges against Feng and his associates.
Court Orders Bitcoin Surrender and Prison Sentence
Feng received a sentence exceeding 14 years in prison and must surrender 90 “hidden” Bitcoins valued at over $11 million at current market prices. The case shows growing cryptocurrency use for money laundering despite China’s strict ban on crypto trading and banking system participation in virtual asset transactions.
Chinese authorities maintain their stringent stance against domestic cryptocurrency activities while recognizing the value of confiscated digital tokens. The government frequently liquidates seized cryptocurrencies through Hong Kong exchanges, where virtual asset trading remains legal and regulated.
Beijing police announced plans last month to liquidate seized cryptocurrencies through licensed Hong Kong exchanges via a partnership with China’s Beijing Equity Exchange. This systematic approach provides a legal mechanism for converting confiscated digital assets into traditional currency.
Massive Crypto Seizures Create Government Holdings
The scope of confiscated cryptocurrency assets has created a sizeable market, though exact holdings across various Chinese government levels remain undisclosed. Individual cases show the enormous values involved in crypto-related criminal investigations.
Authorities in Yancheng, Jiangsu province, confiscated 195,000 bitcoin from a Ponzi scheme in 2020, representing approximately $23.4 billion in current valuations. Such seizures highlight both the scale of cryptocurrency crime and the government’s accumulation of crypto through law enforcement actions.
The Haidian People’s Procuratorate case reveals the techniques used by criminals to exploit cryptocurrency’s pseudonymous nature. Mixing services and multiple platform usage attempts to break transaction trails that investigators can follow.
Hong Kong Serves as Liquidation Hub
China’s approach of using Hong Kong as a liquidation center allows authorities to convert seized assets while maintaining domestic crypto restrictions. This strategy separates enforcement activities from direct participation in cryptocurrency markets.
The Beijing Equity Exchange partnership creates an institutional framework for handling confiscated digital assets systematically rather than through ad-hoc sales. This development indicates China’s long-term approach to managing cryptocurrency seizures.
Related: China’s Plan to Fight Dollar Dominance Begins in Hong Kong on August 1
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