In short
Authorities recovered over 90 BTC, valued at about $11 million.
Prosecutors stated the funds have been moved by eight offshore exchanges and obscured utilizing coin mixing instruments.
The case was included in a authorities report highlighting the rise of crypto-enabled fraud in China’s tech sector.
A Beijing court docket sentenced a former expertise agency government to 14 years and 6 months in jail on Tuesday for embezzling 140 million yuan (US$19.5 million) and laundering the funds by crypto.
The manager, surnamed Feng, held duty for approving incentive payouts at a brief video platform.
Prosecutors stated he colluded with exterior distributors to submit false claims and reroute company funds into accounts he managed. The cash was then transformed into Bitcoin and different digital belongings throughout eight abroad buying and selling platforms.
The case is marked by three options: “petty officers committing main corruption, laundering by digital foreign money, and weak enterprise danger consciousness,” prosecutor Li Tao defined to the native paper Individuals’s Each day, with the report first cited by South China Morning Put up.
To obscure the origin of the funds, Feng and his associates employed coin mixing methods: instruments that obfuscate blockchain transaction trails by pooling and redistributing crypto belongings. Authorities traced the move and in the end recovered over 90 Bitcoin, value virtually $11 million at present costs.
“Tracing funds by coin mixing considerably will increase complexity, however doesn’t assure full anonymity,” Dan Dadybayo, analysis and technique lead at Unstoppable Pockets, informed Decrypt.
Present blockchain analytics instruments “leverage sample recognition, statistical clustering, and timing evaluation,” Dadybayo defined.
Via these, investigators may “partially and even absolutely reconstruct flows in lots of instances,” although these depend upon the “dimension of the anonymity set and habits of the actors concerned,” he added.
Prosecutors stated their investigation used superior digital knowledge overview to hint the move of funds, detailing embezzlement, conversion, and laundering. Digital forensics helped hint coin mixing and hyperlink offshore exchanges to home banks.
Citing native companies similar to Salus Safety, Beosin, and SlowMist, Dadybayo stated Chinese language legislation enforcement has more and more used blockchain analytics instruments in crypto investigations to assist asset tracing and AML enforcement.
A complete of seven people have been convicted of occupational embezzlement, receiving jail sentences starting from three to over 14 years, together with further fines.
The case exemplifies findings from a whitepaper launched by Beijing’s Haidian District prosecutors analyzing 1,253 business corruption instances in tech corporations from 2020 to 2024.
The report confirmed a shift from conventional bribery to crypto-enabled fraud, with ways like knowledge abuse, shell companies, and cash laundering.
Sectors like e-commerce and AI have been flagged as high-risk on account of weak oversight. Feng’s case was among the many ten highlighted examples.
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