A Chinese government official, Xiao Yi, has been handed a life sentence for his involvement in both an unauthorized $329 million Bitcoin mining venture and unrelated corruption charges. The Intermediate People’s Court of Hangzhou City recently delivered the verdict, underscoring China's crackdown on both crypto-related and non-crypto-related wrongdoings.
Xiao Yi, formerly a member of the Jiangxi Provincial Political Consultative Conference Party Group and vice chairman, was found guilty of corruption and abuse of power on August 22, according to local media reports. The corruption charges stem from instances of bribery dating back to 2008 through 2021. Additionally, the abuse of power charges are linked to his role in providing financial and electricity subsidies to Jiumu Group Genesis Technology, a company based in Fuzhou that once managed over 160,000 Bitcoin mining machines.
Prosecutors have asserted that Yi concealed the extent of the mining operation by directing various departments to fabricate statistical reports and manipulate electricity consumption classifications. Between 2017 and 2020, Jiumu Group's electricity usage reportedly constituted 10% of Fuzhou's total consumption. The ruling magistrate from the Hangzhou People’s Court noted that Yi had admitted guilt, expressed remorse, and voluntarily returned the embezzled funds, alongside the seizure of all bribe-related profits.
China currently maintains a ban on cryptocurrency transactions, exchange activities, and fiat-to-crypto conversions, while permitting ownership to a certain extent. In a recent development, a Chinese court invalidated a $10 million Bitcoin lending contract based on the country's Bitcoin ban, ruling out the possibility of legal debt recovery. Another instance involved a Chinese individual sentenced to nine months in prison for aiding a friend in purchasing Tether, which resulted in a $20 profit.
As China maintains its strict stance on cryptocurrency-related activities and corruption, the sentencing of Xiao Yi serves as a stern reminder of the consequences individuals may face for engaging in unauthorized business ventures and misconduct.
(ZHIYUAN SUN, CoinTelegraph, 2023)