Key takeaways:
- Zhao Dong, the founder of the OTC crypto trading desk RenrenBit, which allowed trading in both crypto and local currencies, was sentenced to seven years in prison.
- The authorities conducted a detailed investigation that concentrated on accounts connected to the alleged crimes and unraveled the intricate financial transactions.
Zhao Dong, the founder of the over-the-counter (OTC) cryptocurrency trading desk RenrenBit, which allowed trading in both cryptocurrencies and local currencies, was sentenced to seven years in prison. Details of the punishment have reportedly been made public by China’s Supreme Procuratorate.
The Chinese legal prosecution office declared on December 27 that Zhao, popularly known as the “OTC King,” had been found guilty of running a cryptocurrency company and taking part in foreign exchange trades without a license. Although cryptocurrency is still illegal in the nation, this action demonstrates the continuing attack on it.
According to reports, the authorities conducted a detailed investigation that concentrated on accounts connected to the alleged crimes and unraveled the intricate financial transactions. To compile evidence against Zhao and his colleagues, the authorities turned to witness statements, bank records, communication logs, and confessions.
In three public sessions, Zhao and his partners contended that they were not engaging in foreign exchange trading during the case. They claimed their activities were not unlawful commercial operations because they were simply digital currency exchanges. Nonetheless, the prosecution offered proof about foreign currency in Zhao’s and his group’s chat logs.
Zhao got payments from foreigners, as confirmed by multiple associated receivers. The report stated:
“All defendants admitted that Zhao and others in Dubai collected dirhams in cash, paid RMB to the other party’s designated account, bought Tether with dirhams, and let the domestic gang illegally sell it back for RMB.”
Ultimately, Zhao was found guilty and given a seven-year prison sentence and a fine of 2.3 million Chinese yuan ($325,000).
The People’s Bank of China (PBoC) voiced support for a worldwide initiative to implement cryptocurrency laws while discussing concerns with DeFi and cryptocurrency regulation. With just 1% of the global financial system, the cryptocurrency industry is primarily unrelated to traditional finance.
