Recently, Chinese authorities have handed down a life sentence to former party official Yi Xiao for multiple acts of corruption, including involvement in Bitcoin mining. Xiao, a former provincial official of the southeastern province of Jiangxi, was accused of using his position for cryptocurrency mining.
From 2008 to 2021, Xiao leveraged his position as vice chairman of the Jiangxi provincial committee of the People’s political consultative conference to illegally accept more than 125 million yuan ($17.1 million), according to the court trial in Hangzhou, a city in East China’s Zhejiang province.
Significantly, the court found that from 2017 to 2021, when Xiao was party secretary of Fuzhou city, he assisted enterprises involved in crypto mining. Consequently, this resulted in significant losses to public property, and national, and people’s interests.
Hence, the court sentenced Xiao to life imprisonment, permanently losing political rights, and confiscating his possessions. This decision comes as China continues to crack down on cryptocurrency transactions and mining within the mainland.
Moreover, in September 2021, China outlawed all cryptocurrency transactions inside the mainland. This move starkly contrasts Hong Kong, which is aggressively growing its crypto and Web3 sectors. Additionally, in May 2021, China began a widespread crackdown on crypto mining in some areas.
Besides Xiao’s case, Shenzhen Shikongyun Technology, one of China’s major Filecoin mining enterprises, was reportedly in court in the Guangxi autonomous region last week. The company faces allegations of its role in an $83.3 million pyramid scam.
China’s stance on cryptocurrency has been clear, with the government taking a hard line against crypto-related activities. However, the sentencing of a former party official for corruption and involvement in crypto mining highlights the extent of the crackdown. The case of Yi Xiao serves as a reminder of the risks associated with cryptocurrency activities in China, particularly for those in positions of power.
