The Intermediate People’s Court of Hangzhou City has handed down a life sentence to a Chinese government official, Xiao Yi, for illicit activities related to running a massive Bitcoin mining enterprise and unrelated corruption charges. This news highlights the government’s ongoing crackdown on cryptocurrency operations within the country.
Life Sentence for Corruption and Bitcoin Mining Activities
On Aug. 22, Xiao Yi, a former member of the Jiangxi Provincial Political Consultative Conference Party Group and vice chairman, received a life sentence for corruption and abuse of power.
A 2.4 Billion Yuan Bitcoin Mining Operation
Yi’s involvement in the Bitcoin mining enterprise was staggering. Operating through Jiumu Group Genesis Technology, based in the city of Fuzhou, he facilitated the running of over 160,000 Bitcoin mining machines. This mammoth operation accounted for 10% of Fuzhou’s total electricity consumption from 2017 to 2020.
Yi was charged with instructing relevant departments to fabricate statistical reports and manipulate the classification of electricity consumption, thereby “covering up” the mining operation.
Unrelated Corruption Charges
The corruption charges against Yi date back from 2008 to 2021 and stem from non-crypto-related activities, including bribery. In a statement from the Hangzhou People’s Court, the ruling magistrate noted that Yi pleaded guilty, actively returned the stolen funds, and all the bribes and their profits have been seized.
China’s Stance on Cryptocurrency
China has maintained a tough stance against cryptocurrency transactions, banning all forms of transactions and exchange operations, including fiat-to-crypto onboarding. However, it has not prohibited outright ownership of cryptocurrencies.
Recent legal decisions in the country have further solidified this position. On Aug. 3, a Chinese court ruled a $10 million Bitcoin lending contract invalid based on the country’s Bitcoin ban, eliminating the possibility of legal debt recovery. Furthermore, on Aug. 14, a Chinese national was sentenced to nine months in prison for profiting $20 from helping an acquaintance purchase Tether (USDT).
BTC Tickers and Global Uncertainty
The current situation in China adds to the global uncertainties surrounding Bitcoin and other cryptocurrencies. With China being a significant player in the crypto space, the government’s stern measures might continue to affect market dynamics and investor confidence.
The sentencing of a prominent Chinese government official to life in prison for corruption and involvement in a billion-dollar Bitcoin mining enterprise reflects the Chinese government’s rigorous enforcement of its crypto regulations. This case serves as a stark reminder to those involved in the industry to tread carefully, particularly in jurisdictions with stringent regulations against cryptocurrency.
