China’s uncompromising stance on illicit cryptocurrency operations has hit new heights with the life imprisonment of Xiao Yi, a former high-ranking political figure, amid charges of corruption and a $329 million Bitcoin mining scheme.
Xiao Yi, once part of the Jiangxi Provincial Political Consultative Conference Party Group and holding the post of vice chairman, found himself under the judicial microscope not only for his crypto-related misdemeanors but also for a string of corruption activities stretching over 13 years, from 2008 to 2021.
The most significant aspect of the crypto charges lay in Yi’s affiliation with Jiumu Group Genesis Technology, a colossal Bitcoin mining operation based in Fuzhou City. At the peak of its activities, the company ran a staggering 160,000 Bitcoin mining machines, drawing significant power resources. Yi’s role, according to prosecutors, was primarily in manipulating statistics and masking electricity consumption, ensuring the mining activities continued unhindered. For context, between 2017 to 2020, Jiumu consumed 10% of Fuzhou’s entire electricity — a testament to the operation’s scale.
But the net tightened around Yi when he was found aiding in the concealment of this behemoth mining operation. His tactics involved directing relevant departments to modify statistical reports and reclassify the energy consumption to reflect a more benign scenario.
Despite the weight of these charges, the Hangzhou People’s Court noted that Yi accepted his guilt and showed remorse. He actively started the process of returning the misappropriated funds, ensuring the corrupt money and its derived profits were seized.
China’s stringent measures against cryptocurrencies have been a subject of global discussion. The nation has unequivocally banned all cryptocurrency-based transactions and exchange platforms. Though owning cryptocurrencies isn’t prohibited outright, the Aug. 3 ruling saw a Chinese court invalidate a Bitcoin lending contract worth $10 million, further narrowing down the avenues for legal crypto activities within the nation.
In yet another incident showcasing China’s unyielding approach, a Chinese citizen received a nine-month prison sentence merely for assisting in a Tether purchase and making a modest $20 profit.
With these measures, China continues to send a strong message to the world: that it will take resolute action against any infractions in the crypto space, regardless of the offender’s stature.