Chinese Official’s Bitcoin Mining Support Leads to Life Sentence
Xiao Yi, a former Chinese party official, has been sentenced to life in prison for bribery and abuse of power. Some of his charges are linked to his involvement in supporting Bitcoin mining activities.
The Chinese official reportedly used his influence to provide Bitcoin mining businesses with financial subsidiaries and backing and provisions for power supply.
Exploiting Power for Bitcoin Mining Operation Benefits
On Aug. 22, in a report published locally, the Hangzhou Intermediate People’s Court declared Yi guilty of both bribery and abuse of power through its ruling.
The report indicates the total amount of bribes is more than approximately $17.4 million USD. “The total illegal acceptance of property is equivalent to more than 125 million yuan,” it states.
However, while the bribery charges were labeled “particularly huge,” the abuse of power charges were highlighted as “particularly serious.” His engagement with Bitcoin mining operations appears to fall under the abuse of power charges.
It explains that Yi, in his position as a Chinese party official, assisted Bitcoin mining companies by providing financial subsidies, fund support, and power guarantees. Prosecutors declare that it caused “heavy losses” to public property, the interests of the country, and its citizens.
China’s Strong Stance on Crypto
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In 2021, China’s state council declared a prohibition on cryptocurrency mining. This decision came after The National Development and Reform Commission (NDRC) labeled it “undesirable” in 2019. The regulatory body highlighted its negative environmental impact.
However, Chinese authorities implemented a ban on trading Bitcoin and other cryptocurrencies in September 2017. This crackdown was heightened in 2021 when it tried to completely wipe out all Bitcoin mining operations in the country
Earlier reports indicate that the hash rate on Bitcoin’s network briefly dropped 50% following the ban. The price of Bitcoin dropped to around $28,000 from a then-all-time high of $65,000.
However, as crypto is becoming more widely adopted across the globe, China appears to be slowly looking into its potential. The Hong Kong Monetary Authority (HKMA) is actively advancing its regulatory framework on stablecoins and reportedly intends to finalize it by 2024.
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