Case disclosure: Chengdu "casino boss" used 30,000 bitcoins to launder money, spending 300 million yuan, now worth 2.5 billion yuan, and also bought mining machines for mining

According to the "Risk Warning on Preventing Illegal Fund Raising in the Name of "Virtual Currency" and "Blockchain"" issued by the China Banking and Insurance Regulatory Commission and other five departments, please establish a correct investment concept. The content of this article does not endorse the promotion of any business or investment activities . Investors are requested to raise their awareness of risk prevention.

On the 30th, China Business News disclosed a case in which a casino tycoon in Chengdu used Bitcoin to launder money. The amount involved was huge. He bought Bitcoin for 300 million yuan and sold it for 730 million yuan after being arrested. The amount was extremely shocking. Wu said that although it was only a case from 3-4 years ago, it still shows that the application of Bitcoin in the gray area is far beyond our imagination. It can be expected that the regulatory authorities will continue to strengthen their crackdown.

The article stated that Xiao Kaiqiang and others from Chengdu Century Yangtian Technology Co., Ltd., located in Chengdu Hi-tech Zone, illegally earned a total of 1.13842 billion yuan by opening three online gambling platforms in more than two years from April 2015 to July 2017. On May 15, 2019, the first instance of the case was publicly sentenced. Eight principal offenders were convicted of opening a casino and sentenced to three to five years in prison. Xiao Kaiqiang was sentenced to five years in prison and fined 50 million yuan. Almost all the people involved in the case except the principal offender were sentenced to suspended sentences, and all of them said they would not appeal.

In the sentencing of Xiao Kaiqiang and others, the court pointed out that online gambling crimes have the characteristics of cross-regional, non-contact and concealment, and are also easy to link, involve a wide range of people, involve huge amounts of money, are simple to operate, and transfer funds quickly. Assets are transferred through Bitcoin transactions for money laundering, and gamblers are uncontrollable, etc. The amount involved is the highest in Zhejiang.

Xiao Kaiqiang started his business after graduating from university at the age of 22. He was once named a national rural youth leader in getting rich, the first outstanding urban entrepreneurial youth in Sichuan, and an outstanding young entrepreneur in Yibin City. In 2005, the company's independently developed online game platform "Yibin Online Game Center" was launched, focusing on chess and card games.

Due to poor management, it began to launch gambling platforms in 2015, including "Jiufa Chess and Cards", "New Fishing", Happy 799, etc. In order to conceal the flow of funds, after February 2016, Jiufa Chess and Cards and New Fishing successively adopted Bitcoin dividends, which were operated by Zhang Xiaoming, the head of the "Customer Service Team".

Zhang Xiaoming confessed that they would directly transfer the gambling money to the Bitcoin trading platform, which would return the Bitcoin to his Bitcoin wallet. Initially, he used a friend's account to buy Bitcoin directly on a certain website. After February 2017, he used other people's ID cards and bank cards to buy Bitcoin on the offline black market. After the Bitcoin arrived, he distributed it to Xiao Kaiqiang, He Zili and other major participants according to their shareholding ratio.

Zhang Xiaoming said that he bought more than 2,000 bitcoins every month on a certain website, and a total of more than 28,000 bitcoins. He couldn't remember how much he bought on the black market. In addition, he spent hundreds of millions of yuan to buy thousands of bitcoin mining machines, which theoretically generated thousands of bitcoins.

The legal representative of a Shenzhen technology company said that she and two other partners were mainly engaged in Bitcoin transactions. Zhang Xiaoming would create a new temporary WeChat group every time he traded with them, and buy about 100 Bitcoins each time, with each Bitcoin costing about 8,000 yuan.

According to the verdict, after Xiao Kaiqiang was arrested, he submitted a written application in the detention center, expressing his willingness to cooperate in selling the 32,580 bitcoins in his bitcoin wallet for RMB and withdrawing illegal profits. He spent nearly 300 million yuan to buy these bitcoins, and sold them for 730 million yuan, all of which were seized as stolen money and interest. According to the current value of bitcoin, it is worth nearly 2.5 billion yuan. If it is sold at the highest point in 2017, the value may exceed 5 billion.

Officer Wang pointed out that Bitcoin and gold are both ways for criminals to launder money. The destination of the funds is often the major cities on the southeast coast, where there are not only a large number of Bitcoin startups, but also a huge gold market. "We track the transfer flow from account A to account B, account B to account C, and finally the focus of the money is the bank account that sells gold. Just like Bitcoin, gold is also untraceable. He can re-process the gold to complete the money laundering."

Since the beginning of this year, due to criminals using cryptocurrency to launder money in telecommunications fraud, police investigations have led to the freezing of a large number of bank cards. In Dongguan alone, thousands of cards have been frozen, involving hundreds of millions of yuan. As the authorities pay attention to the application of cryptocurrency in gambling, drug-related and other fields, more severe crackdown measures can be taken. In terms of gambling, since the deployment of a special meeting on combating cross-border gambling on February 28, the Ministry of Public Security has deployed public security organs across the country to seize more than 220,000 bank cards involved in the case and freeze more than 28,100 accounts involved in the case.

Lawyer Xia said that recently there has been frequent money laundering through over-the-counter inbound and outbound currencies, especially USDT. The over-the-counter USDT trading area is a disaster area where funds involved in telecommunications fraud are used for money laundering. Recently, police in various places have launched special anti-fraud activities to combat the increasingly rampant fraud activities after the epidemic. The large-scale freezing of cards in Dongguan is very likely related to this.