China convicts BKEX staff for crypto gambling | CryptoTvplus
BKEX staff members in China have been sentenced for engaging in unlawful gambling activities via cryptocurrency contracts.
A Chinese court sentenced BKEX employees after determining that the platform’s crypto contract trading facilitated illegal betting operations.
The court ruled that BKEX’s contract trading platform operated as an illegal gambling operation, sentencing multiple employees and agents to prison.
On January 29, a court in Pingjiang County, Hunan Province, declared BKEX’s contract transactions as online gambling and held those involved accountable for “opening a casino.”
According to the ruling, BKEX enabled betting with USDt, a stablecoin backed by the US dollar, and provided leverage as high as 1,000x for users to trade on the price movements of Bitcoin (BTC), Ether, and other crypto assets.
Futures trading involves a contractual arrangement where two parties agree to transact an asset at a set price on a future date.
In cryptocurrency trading, leverage allows traders to amplify their exposure to price movements, leading to both higher rewards and greater risks.
Under Chinese law, the court identified these activities as illegal gambling because they encouraged people to wager on financial fluctuations.
Legal filings indicate that Ji Jiaming founded BKEX in 2018 through a company called Chengdu Dechen BiKe TianXia Technology.
He repeatedly modified the company’s registration to avoid investigation, ultimately leading to its dissolution.
In 2021, Ji and Lei Le collaborated to form a Shenzhen-based team that developed and introduced the perpetual contract trading function, a key element of BKEX’s operation.
BKEX’s contract trading function attracted over 270,000 users, including 60,000 active traders, and generated more than 54.7 million USDT in profits before authorities intervened.
The court charged and convicted a total of eight persons.
Read also: Chinese police arrest 193 linked to the operation of an illegal underground crypto bank
As a former wallet engineer and department head, Zheng Lei aided a gambling operation by providing technical support. He received a two-year and one-month prison sentence, a fine of 150,000 yuan ($20,900), and authorities confiscated his 1.34 million yuan ($186,600) in earnings.
At BKEX, Wang managed the audit department, overseeing both KYC verification and transaction processing. The court sentenced him to 1 year and 11 months in prison and ordered him to pay a fine of 52,000 yuan ($7,250).
As an agent, Dong earned $33,558 in commissions from BKEX by recruiting users via QR codes and referral links. The court sentenced him to one year and six months in prison (suspended), imposed a 35,000 yuan ($4,880) fine, and confiscated his earnings totaling 223,000 yuan ($31,000).
China’s government views cryptocurrency activities as a threat to financial stability, and this ruling forms part of its ongoing crackdown on such practices.
The government has taken repeated steps to ban cryptocurrency, including a 2013 prohibition on banks handling crypto, a 2017 ban on ICOs and exchanges, and a 2021 crackdown on mining and trading.