A former Chinese government official has been sentenced to life in prison after being found guilty of running an illegal Bitcoin mining enterprise and engaging in corrupt practices.
Corruption and abuse of power
Xiao Yi, a former member of the Jiangxi Provincial Political Consultative Conference Party Group and Vice Chairman, was convicted by the Intermediate People's Court of Hangzhou City. The charges against him relate to bribery and abuse of power.
The corruption charges stem from activities unrelated to cryptocurrency, involving bribery that took place between 2008 and 2021. The abuse of power charges, on the other hand, are related to providing financial and electricity subsidies to Jiumu Group Genesis Technology, a company that operated a large-scale Bitcoin mining operation.
Covering up the mining operation
According to prosecutors, Yi attempted to conceal the Bitcoin mining operation by instructing relevant departments to fabricate statistical reports and manipulate electricity consumption figures. At one point, Jiumu Group Genesis Technology operated over 160,000 Bitcoin mining machines and accounted for 10% of the total electricity consumption in the City of Fuzhou between 2017 and 2020.
The ruling magistrate of the Hangzhou People's Court stated that Yi had pleaded guilty, repented for his actions, and returned the stolen funds. All the bribes he received, as well as their profits, have been seized.
China's stance on cryptocurrency
China has a strict stance on cryptocurrency and has banned all forms of cryptocurrency transactions, exchange operations, and fiat-to-crypto onboarding. However, ownership of cryptocurrencies itself is not explicitly prohibited.
In a recent court 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. Additionally, a Chinese national was recently sentenced to nine months in prison for assisting someone in purchasing Tether (USDT) and profiting $20 from the transaction.
The former government official, Xiao Yi, now awaits his sentencing.
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