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Feng, a former employee of a short video platform, defrauded the company of 140 million yuan (about $19 million) by collaborating with external partners using insider information, according to a case announced by Beijing's Haidian District Procuratorate.
It was determined that Feng and his accomplices converted this money into Bitcoin and laundered it using “coin mixing” methods. Eight people were sentenced to prison and fines. More than 90 Bitcoins were seized and turned over to authorities.
According to the People's Daily, Feng was responsible for approving applications for service providers and developing and implementing incentive policies for the short-form video platform he worked for. In the rewards and incentive policies the company regularly offered to stimulate growth, Feng exploited his position to create loopholes in the system. He shared these loopholes with his external partners, Tang and Yang, and transferred millions of yuan worth of incentives using forged application documents.
Multiple front companies were established by individuals affiliated with Tang and Yang to conceal the corrupt proceeds. These companies were used to collect the stimulus payments, which were then quickly funneled into secret accounts ultimately controlled by Yang.
Feng and his associates used eight different overseas cryptocurrency exchanges to launder the money by converting 140 million yuan of funds into cryptocurrencies. A significant portion of the funds, made difficult to track through coin mixing, were converted into Bitcoin.
Feng and his seven co-defendants were sentenced by the Beijing Haidian District People's Court to prison terms ranging from three to 14 years and six months, as well as fines, for “embezzlement through abuse of office.” The verdict is final. The prosecutor's office also seized more than 90 Bitcoins, partially compensating the company for its losses.
*This is not investment advice.