Xiao Yi, a former Chinese official, received a life sentence for corruption and operating a $329 million Bitcoin mining enterprise.
Xiao Yi, once a key government figure in China, will spend the rest of his life in prison. The punishment is a result of his deep involvement in a massive Bitcoin mining operation, along with separate corruption charges.
The Charges Against Xiao Yi: Corruption and Power Misuse
Between 2008 and 2021, Xiao Yi accepted bribes, leading to corruption charges. The abuse of power charges, which date from 2017 to 2021, link directly to his support of a company called Jiumu Group Genesis Technology.
This company, based in Fuzhou, ran over 160,000 Bitcoin mining machines. With Xiao Yi’s backing, they received financial help and cheaper electricity. By manipulating reports and changing how electricity usage was recorded, Xiao Yi hid the large mining operation.
From 2017 to 2020, the company’s use of electricity made up a shocking 10% of all electricity used in Fuzhou. When caught, Xiao Yi admitted his guilt, gave back the money he’d stolen, and had all the bribes taken from him.
China’s Tough Stance on Cryptocurrency
This harsh sentence against Xiao Yi follows China’s strong position against cryptocurrency. While people in China can still own cryptocurrency, the country has banned all transactions, trading, and turning regular money into crypto money. This becomes more relevant given that countries like China are working on Central Bank Digital Currencies (CBDCs), which have many security and “freedom” implications.
Earlier in August, a Chinese court said a $10 million Bitcoin lending agreement was not legal. This decision was based on the country’s ban on Bitcoin, meaning the money could not be legally claimed back. On August 14, another person in China went to prison for nine months for helping someone buy a type of cryptocurrency called Tether and only making $20 from the deal.