Chinese official sentenced to life in prison for abusing power in Bitcoin mining

China's crackdown on cryptocurrencies is once again in full force as local officials who funded a Bitcoin mining company worth $330 million are sentenced to life in prison on charges of bribery and abuse of power, and ordered to surrender all personal assets to the state treasury. Previously, Chinese courts have also issued rulings such as declaring Bitcoin loans unenforceable and unable to be returned, and sentencing individuals to 9 months in prison for assisting friends in buying USDT.

Chinese Official Sentenced to Life Imprisonment for Involvement in Bitcoin Mining

Worker's Daily reported that a local court in China sentenced Xiao Yi, former party member and vice chairman of the Jiangxi Provincial Political Consultative Conference, to life imprisonment for corruption and abuse of power, confiscating all of his personal assets. Previously, Xiao expressed regret and apology in the second episode of the documentary "Always Blowing the Battle Horn" titled "Political Supervision."

It was reported that Xiao Yi was involved in operating and privately funding the "Jiumu Group Genesis Technology Co., Ltd.," a company related to Bitcoin mining during his tenure. At one point, the company operated over 160,000 Bitcoin mining machines, accounting for 10% of the local electricity consumption.

From 2017 to 2021, the defendant provided financial and power subsidies to companies engaged in digital currency mining activities, causing significant losses to the country and people's interests, violating the new development concept and national regulations, constituting abuse of power.

The prosecutor added that besides falsifying electricity reports to conceal mining activities, Xiao Yi also assisted several units involved in engineering contracts and job promotions, illegally receiving bribes totaling 125 million RMB.

The judge in the case stated that if the defendant confesses and cooperates with the investigation, actively returning the funds, a lighter sentence may be considered.

Unstoppable Cryptocurrency Ban

Previously in 2021, China had successively banned all forms of cryptocurrency trading and exchanges on a large scale, but did not ban ownership. At that time, the overall computing power of the BTC network had dropped significantly by 41% in two weeks.

However, internal data from Binance employees previously indicated that the monthly trading volume of cryptocurrency by Chinese users was 90 billion USD, accounting for 20% of global trading volume, making it seemingly unstoppable.

Of course, the Chinese authorities are still making every effort to prevent its circulation. Just last week, a person was sentenced to 9 months in prison and fined 680 USD for assisting acquaintances in purchasing USDT and earning a $20 commission from the transaction, a loss outweighing the gain.

Borrowing Bitcoin Without Repayment?

Previously, local Chinese media reported that Mr. Xu lent 341 Bitcoins to his friend Mr. Lin through a written contract a few years ago when Lin was in need of funds. However, Lin repeatedly defaulted on the debt, leading Xu to file a lawsuit.

However, the judge in the case stated that Bitcoin is a virtual commodity and does not have the same legal status as fiat currency, making it ineligible for compensation. Additionally, no digital currency can be used as currency for circulation in the market. Therefore, the court ultimately dismissed the lawsuit, resulting in Xu's loss of over 8.8 million USD.

The transaction behavior of borrowing Bitcoin between the two parties is currently not protected by law. Furthermore, Bitcoin does not have the practical ability to be returned and cannot be quantified using fiat currency. Thus, the lawsuit was dismissed.