Key points to remember
- More than $20 million embezzled from a technology company, and converted into Bitcoin via offshore platforms.
- Recourse to coin mixers to make transactions anonymous and to complicate fund tracking.
- Severe convictions: up to 14 and a half years in prison for those involved in the embezzlement.
- Regulatory framework already strict in China, which could be strengthened after this case.
A large-scale crypto fraud revealed in Beijing.
A Beijing court convicted seven people involved in a money laundering via Bitcoin case, for a total of $20 million. Uncovered by The Paper and Cointelegraph, the case reopened the discussion about financial security and the current system limitations when it comes to cryptocurrency.
It all started in a technology company in Beijing where a former employee embezzled 140 million yuan (≈$19,3 M) by generating false work bonuses for fake providers.
Those dummy corporations, set up with help from accomplices, were used to transfer funds. The money was sent to eight foreign-based crypto exchange platforms, and then converted into Bitcoin (BTC) and other cryptocurrencies.
In order to make the transactions harder to track, the embezzlers used coin mixers, tools that mix multiple transactions to hide the origin of the funds. Then, part of the cryptocurrencies were converted into yuan and transferred to private accounts.
Despite these techniques, specialized investigators managed to trace the movements via the blockchain and recover more than 90 BTC, that is, nearly $11 million..
Harsh prison sentences for the defendants
The seven people were found guilty of embezzlement and sentenced to prison terms ranging from 3 to 14 and a half years. The verdict emphasizes the authorities’ willingness to fight against the illegal activities related to digital assets.
Since the ban of trading and mining in 2021, China has maintained a very strict policy towards cryptocurrencies. However, fraud continues to persist.
In April 2025, the city of Shenzhen issued a warning about fake tokens linked to the yuan, promoted by unauthorized entities using Web3 technical language to deceive investors.
Even if some observers are talking about a possible relaxation of the rules, particularly those related to stablecoins, that new case could block any progress in this direction.
To date, no official announcement has been made. But in an already tense context, that case could push authorities to strengthen their surveillance of crypto-assets.
