Chinese tech exec gets 14 years for $19M embezzlement, crypto money laundering

The executive, identified only by the surname Feng, stole the money from a Beijing-based company and bought cryptocurrencies overseas, then converted portions of the assets back into yuan, and then transferred the funds into their mainland bank accounts, according to a report the People’s Daily as cited by the South China Morning Post.

An illustration of Bitcoin. Photo by Unsplash/Traxer

By exploiting vulnerabilities in a recently introduced bonus system, Feng facilitated fraudulent submissions by his accomplices. These submissions were designed to seem compliant with company policies, enabling fake operators to unlawfully obtain reward payouts, according to CryptoDNES.

Feng was ordered to surrender 90 "hidden" bitcoin valued at over $11 million based on current prices.

The case highlighted the rising use of cryptocurrencies for money laundering in China, where authorities maintain a stringent ban on crypto trading and prohibit its banking system from engaging with these virtual assets.

Despite their strict stance, Chinese authorities recognize the value of cryptocurrencies and frequently liquidate confiscated digital tokens in Hong Kong, where virtual-asset trading is permitted.

Last month, police in Beijing announced a plan to liquidate cryptocurrencies seized in criminal cases by selling them through licensed exchanges in Hong Kong through a partnership with the China Beijing Equity Exchange.

The confiscated crypto assets have created a sizeable market, although it remains unclear how much cryptocurrency is held by various levels of Chinese authorities.

In one typical case, authorities in Yancheng, a city in eastern Jiangsu province, confiscated 195,000 bitcoin from a Ponzi scheme in 2020, which would be valued at about $23.4 billion at current prices.