Chinese Official Sentenced To Life Prison For Bitcoin Mining
Former Chinese party official, Yi Xiao, sentenced to life imprisonment for corrupt Bitcoin mining activities, highlighting China's strict stance on crypto.
The recent life imprisonment of a former Chinese party official, Yi Xiao, for corrupt activities related to Bitcoin mining underscores the nation's rigorous approach to crypto-related activities.
China has been known for its strict regulations concerning cryptocurrencies. In September 2021, the nation banned all crypto transactions on the mainland. This move was preceded by a crackdown on crypto mining that began in May 2021. These decisions were part of China's broader efforts to maintain financial stability and prevent potential risks associated with the volatile nature of cryptocurrencies.
The Rise and Fall of Yi Xiao
Yi Xiao, a former member of the Jiangxi Provincial Political Consultative Conference Party Group, held the position of vice chairman. His influential role in the political arena provided him with significant power and connections, which he would later exploit for personal gain.
Yi Xiao in the Chinese Communist Party
Yi Xiao was found guilty of running a Bitcoin mining enterprise worth 2.4 billion Chinese yuan (approximately $329 million). He collaborated with Jiumu Group Genesis Technology, a firm based in the city of Fuzhou. At its peak, this company operated more than 160,000 Bitcoin mining machines.
To conceal this massive mining operation, Xiao instructed relevant departments to falsify statistical reports and modify the classification of electricity consumption. Between 2017 and 2020, Jiumu's electricity consumption accounted for 10% of Fuzhou's total electricity usage.
Apart from his involvement in Bitcoin mining, Xiao faced corruption charges related to activities spanning from 2008 to 2021. These charges were unrelated to cryptocurrencies and pertained to bribery. However, his abuse of power charges, which spanned from 2017 to 2021, were directly linked to his support for Jiumu Group Genesis Technology. He provided the company with financial and electricity subsidies, further fueling their illicit mining operations.
In the court's proceedings, it was revealed that Xiao had pleaded guilty and expressed remorse for his actions. He actively returned the stolen funds, and all the bribes and their profits were seized.
China's decision to sentence a high-ranking official like Yi Xiao to life imprisonment sends a clear message to the nation's citizens and the global community. The country's commitment to curbing illicit cryptocurrency activities is unwavering.
While China has banned all forms of cryptocurrency transactions and exchange operations, it hasn't prohibited outright ownership. However, recent court decisions, such as the invalidation of a $10 million Bitcoin lending contract, highlight the challenges faced by crypto enthusiasts in the country.