August 24, 2023
By Sharan Kaur Phillora
The Intermediate People’s Court of Hangzhou City has sentenced a former prominent Chinese government official, Xiao Yi, to life imprisonment on charges of corruption and abuse of power.
Here’s what we know:
Xiao, once an influential figure as a member of the Jiangxi Provincial Political Consultative Conference Party Group and its vice-chairman, has been embroiled in a sprawling Bitcoin mining scandal involving a staggering 2.4 billion Chinese yuan (approximately $329 million).
Prosecutors have laid out a damning case against Yi, revealing his ties with Jiumu Group Genesis Technology, a company based in Fuzhou. Under his illicit patronage, the firm ran more than 160,000 Bitcoin mining machines, accounting for a jaw-dropping 10% of Fuzhou’s total electricity consumption from 2017 to 2020. To shield this massive operation from scrutiny, Yi masterminded the fabrication of statistical reports and manipulated data on electricity usage.
Additionally, allegations against Xiao Yi span back to 2008, where he reportedly engaged in bribery activities unrelated to the crypto world. As per the court’s documentation, the ex-official had “illegally acquired property worth over 125 million yuan ($17 million), with more than 57.82 million yuan ($7.9 million) still unaccounted for.
China, with its stern stance against cryptocurrencies, has been cracking down on mining operations, exchanges, and transactions. Ownership remains the only exception to this ban. In a recent ruling, a Chinese court deemed a $10 million Bitcoin lending contract void, reflecting the country’s stringent policy against Bitcoin.
Though Yi pleaded guilty and returned the stolen funds, the ruling magistrate confirmed that all bribes and illicit gains had been confiscated. This case underlines China’s commitment to curbing corruption and its ongoing effort to regulate the volatile world of cryptocurrencies. However, with data revealing China’s significant contribution to the global Bitcoin hash rate, the efficacy of these bans remains under scrutiny. As the digital realm expands, China’s recent proposal for a “Digital Identity System” hints at a future of stricter surveillance and control over digital asset activities.
About the author
Sharan Kaur Phillora’s thirst for knowledge has led her to study many different subjects, including NFTs and Blockchain technology – two emerging technologies that will change how we interact with each other in the future. When she isn’t exploring a new idea or concept, she enjoys reading literary masterpieces.