Chinese Government Official Receives Life Sentence for Bitcoin Mining and Corruption
A former Chinese government official, Xiao Yi, has been sentenced to life in prison for engaging in illegal business activities related to a Bitcoin mining enterprise worth 2.4 billion Chinese yuan ($329 million). In addition to the charges connected to the mining operation, Yi was also convicted for corruption.
The Intermediate People’s Court of Hangzhou City issued the life sentence to Xiao Yi on August 22. The corruption charges brought against him involved bribery activities that occurred between 2008 and 2021, unrelated to cryptocurrency. The charges of abuse of power, which led to the prison sentence, were based on Yi providing financial and electricity subsidies to Jiumu Group Genesis Technology, a company in Fuzhou that operated over 160,000 Bitcoin mining machines.
Prosecutors revealed that Yi had concealed the mining operation by manipulating statistical reports and adjusting electricity consumption records. Jiumu Group Genesis Technology accounted for 10% of Fuzhou’s total electricity consumption from 2017 to 2020. The ruling magistrate of the Hangzhou People’s Court stated that Yi admitted his guilt, repented, and returned the stolen funds. All bribes and profits obtained through corruption have been confiscated.
The Context: China’s Stance on Cryptocurrency
China has implemented strict regulations regarding cryptocurrencies. While owning cryptocurrencies is not prohibited outright, the country has banned cryptocurrency transactions, exchange operations, and fiat-to-crypto onboarding. These restrictions have been further reinforced by recent court rulings.
On August 3, a Chinese court declared a $10 million Bitcoin lending contract invalid, citing the country’s ban on Bitcoin with no option for debt recovery. Additionally, on August 14, a Chinese national was sentenced to nine months in prison for assisting someone in purchasing Tether (USDT), profiting $20 from the transaction.
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