tl;dr
Chinese authorities dismantled a major Bitcoin laundering scheme involving employees of Kuaishou, who embezzled nearly 140 million yuan (~$20 million) using Bitcoin and crypto mixing services. Investigators recovered 92 BTC (~89 million yuan/$11.7 million), which was returned to the company. Eight i...
Chinese authorities recently dismantled a significant Bitcoin laundering operation involving employees from Kuaishou, China’s second-largest TikTok-style video-sharing platform. The Haidian District People’s Procuratorate in Beijing revealed that insiders embezzled nearly 140 million yuan (approximately $20 million), using Bitcoin to conceal and transfer the funds through a complex network of crypto exchanges and mixing services. Despite their efforts to obfuscate the transactions, investigators successfully traced the flow of assets and recovered 92 BTC, equivalent to about 89 million yuan ($11.7 million), which was returned to the company.
The case illustrated three key aspects of modern digital-era corruption: the significant corruption by relatively low-level officials, the use of virtual currencies for money laundering, and weak corporate risk management. Feng and seven co-conspirators were convicted of occupational embezzlement and sentenced to prison terms ranging from three to fourteen years, alongside financial penalties. This verdict underscores China’s growing ability to track digital assets even when layered behind anonymizing tools, reflecting a broader trend of commercial corruption interlinked with emerging technologies like cryptocurrency.
This crackdown is part of China’s stringent regulatory stance on cryptocurrencies, motivated by concerns over financial stability, capital flight, criminal activity, and environmental impacts. The government classifies the digital asset market as undesirable, shutting down mining operations across provinces and banning all crypto-related transactions. Courts have even ruled crypto futures trading as gambling, convicting employees of crypto exchanges for operating illegal “casinos.”
The Haidian Procuratorate’s recent white paper highlights 1,253 commercial corruption cases from 2020 to 2024, showing how many schemes increasingly rely on digital tools and collaboration with external actors to evade detection. This development presses tech companies and crypto platforms to bolster monitoring systems amid intensified enforcement. Despite the crackdown, China continues to adapt its economic policies, evidenced by measures like a $138 billion stimulus package and reverse repo rate adjustments, aiming to maintain its economic dominance amidst regulatory and geopolitical shifts.