Authorities in Beijing’s Haidian District recently uncovered a Bitcoin laundering operation involving approximately 140 million yuan (around $20 million) that was allegedly stolen by employees of Kuaishou, a prominent Chinese short-form video platform.
The investigation revealed that several Kuaishou employees colluded with external parties to embezzle company funds intended for business development incentives. These incentives were part of the platform’s subsidy policies designed to reward operators and service providers. However, one employee, identified as Feng, abused their position of authority to manipulate the process for personal gain.
Feng, who was responsible for approving new participants and formulating incentive policies, exploited policy gaps and leaked internal data to outside collaborators during the launch of a new bonus program. These collaborators then submitted falsified applications that met eligibility requirements, allowing them to fraudulently claim reward funds.
To conceal the theft, the conspirators established shell companies to receive the stolen funds and transferred the money through eight offshore crypto exchanges, converting it into Bitcoin in multiple batches. They also utilized crypto mixing services to obfuscate the origin and destination of the assets, making it harder to trace the flow of funds.
After converting the Bitcoin into Chinese yuan through underground channels, the funds ultimately ended up in accounts controlled by Feng and the accomplices. Despite the elaborate laundering process, law enforcement agencies managed to track and seize more than 90 BTC associated with the scheme. The individuals involved were prosecuted and received prison sentences ranging from six months to 14 years for financial misconduct and embezzlement.
This case underscores China’s strict stance on cryptocurrency-related crimes. Despite the country banning crypto trading in 2017 and declaring all digital asset transactions illegal in 2021, authorities remain vigilant in policing the space. It is worth noting that China still holds a substantial amount of Bitcoin, with over 190,000 BTC seized during previous investigations into illicit crypto activities.
This incident serves as a reminder of the risks associated with financial misconduct and the importance of upholding integrity in business practices. As the cryptocurrency landscape continues to evolve, regulatory authorities worldwide are increasing their efforts to combat fraudulent activities and maintain a secure environment for investors and users.