A major embezzlement and laundering scheme involving employees of the short video platform Kuaishou has been exposed in Beijing. The individuals involved siphoned nearly $20 mln from the company, using bitcoin (BTC) and foreign exchanges to hide the trail. The court has sentenced the defendants to prison terms of up to 14 years.
How the Scheme Was Structured
The Haidian District Prosecutor’s Office in Beijing found that a group of Kuaishou employees, including the main organizer identified by the surname Feng, stole approximately 140 mln yuan and converted the funds into bitcoin. To cover their tracks, they used eight offshore crypto exchanges and coin mixing services.
Despite the technical obfuscation, investigators managed to trace the transactions and recover 92 BTC worth about 89 mln yuan ($11.7 mln), returning the assets to the company.
Digital Corruption in Action
According to prosecutor Li Tao, the case illustrates three defining features of corruption in the digital age:
- Large-scale embezzlement by mid-level personnel.
- The use of cryptocurrencies for laundering.
- Weak oversight within corporate structures.
The prosecutor’s office described the incident as a sign of evolving commercial crime schemes.
The court found Feng and seven other defendants guilty of embezzlement. They received prison sentences ranging from 3 to 14 years, along with fines.
Cryptocurrency Under Surveillance
The verdict underscores Chinese authorities’ ability to trace digital assets even when sophisticated anonymization tools are used. This is not an isolated case: previously, former financial official Hao Gang was sentenced to 11 years in Beijing for bribery and laundering through bitcoin.
The Haidian Prosecutor’s Office published a report documenting 1,253 cases of commercial corruption between 2020 and 2024. Officials noted that many of these schemes involved external actors and relied on digital instruments.
Crypto Industry Remains Banned
China continues to enforce one of the strictest regulatory regimes on cryptocurrency. The National Development and Reform Commission (NDRC) has categorized digital assets as an undesirable sector, prompting regional governments to shut down mining centers en masse.
All cryptocurrency transactions are officially banned in the country. Foreign exchanges are prohibited from servicing Chinese nationals. Chinese courts treat crypto futures trading as a form of gambling. For instance, BKEX employees were convicted for “opening a casino.”
Despite the crackdown on the crypto industry, Chinese authorities are adjusting the economy to external challenges. Recent measures include a $138 bln stimulus package and reductions in reverse repo rates.
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