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Monday, June 17, 2024

Chinese Official Sentenced To Life In Prison For Bitcoin Mining, Corruption

Authored by Zhiyuan Sun via CoinTelegraph.com,

A Chinese government official has been sentenced to life in prison for both illegitimate business operations of running a 2.4 billion Chinese Yuan ($329 million) Bitcoin mining enterprise and unrelated charges of corruption. 

According to local media reports, on Aug. 22, the Intermediate People’s Court of Hangzhou City sentenced Xiao Yi, a former member of the Jiangxi Provincial Political Consultative Conference Party Group and Vice Chairman, to life in prison for corruption and abuse of power.

The corruption charges stem from non-crypto-related activities of bribery from 2008 to 2021.

The abuse of power charges, dating from 2017 to 2021, stem from providing financial and electricity subsidies to Jiumu Group Genesis Technology, a firm based in the City of Fuzhou that at one point operated more than 160,000 Bitcoin-mining machines.

Prosecutors say that Yi “covered up” the mining operation by instructing relevant departments to fabricate statistical reports and adjust the classification of electricity consumption.

Former Chinese government official Xiao Yi awaits sentencing. | Source: Intermediate People’s Court of Hangzhou City

From 2017 to 2020, Jiumu’s electricity consumption accounted for 10% of Fuzhou’s total electricity consumption.

“Yi pleaded guilty and repented, actively returned the stolen funds, and all the bribes and their profits have been seized,” wrote the ruling magistrate of the Hangzhou People’s Court.

Currently, China bans all forms of cryptocurrency transactions, exchange operations, and fiat-to-crypto onboarding but has stopped short of prohibiting outright ownership.

In an Aug. 3 decision, a Chinese court ruled that a $10 million Bitcoin lending contract was invalid based on the country’s Bitcoin ban with no possibility of legal debt recovery. On Aug. 14, a Chinese national was sentenced to nine months in prison for helping an acquaintance purchase Tether, profiting $20 from the transaction.

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