China Cracks Down: Crypto Exchange Workers Convicted for ‘Casino’ Crimes

• The People’s Court of Pingjiang County ruled that BKEX’s contract transactions were gambling and sentenced employees and agents for operating an illegal casino.

• Defendants received prison sentences and fines, and their illegal earnings were recovered and returned to the state treasury.

A court in Hunan’s Pingjiang County, China, made criminal rulings about the BKEX exchange by determining that its contract trading functioned as an illegal gambling operation. According to court judgments, platform employees and agents worked with the platform to run an unlawful casino.

China Operational Strategy and Technical Collaborations

The trading platform BKEX emerged from Chengdu Dechen BiKe TianXia Technology Co., Ltd, which Ji Jiaming, an escaped criminal, created in 2018. Technical operations on the platform revolved around digital currency trading methods, including spot trading and exchange functions. Between 2019 and 2022, the company experienced successive name modifications, which resulted in its dissolution.

BKEX platform perpetual contract trading development started in 2021 when Ji Jiaming worked with Lei Le to form an operational team based in Shenzhen for this initiative. Users could employ USDT and various virtual currencies during leveraged betting activities directed toward Bitcoin (BTC) and Ethereum (ETH) price changes and other crypto assets. BKEX enabled market reference data retrieval through its interface, automated forced liquidation, transaction matching, and agent refund payments.

During law enforcement intervention, the platform reached 270,000 contract trading users, of whom 60,000 were active users. The exchange operated through transaction fees alongside forced liquidations and platform bets, creating accumulated profits of 54.8 million USDT.

Legal Implications of Virtual Currency Gambling

Eight verdicts emerged from the court’s proceedings involving two employees and six agents. As wallet engineer and department head, Zheng Lei handled technical development alongside platform maintenance duties for the system. He found employment for his network maintenance work, paying RMB 20,000 to RMB 30,000 monthly. 

According to the prosecution, he helped operate illegal gambling services by serving as technical support. After admitting wrongdoing, Zheng Lei helped authorities locate hidden assets, leading to his two-year prison suspension for a touchdown against RMB 150,000. A Chinese court issued two years and one month of prison to Zheng Lei, who received a full-time suspended sentence and a RMB150,000 fine. The authorities confiscated RMB 1.34 million worth of illegal earnings obtained by him.

The platform’s audit department head, Wang, managed KYC authentication together with fund settlement responsibilities. He provided monetary payments to operate illegal gambling platforms but received prison time. The court handed Wang one year and eleven months in prison while placing a parallel suspension period and requiring him to pay a RMB 52,000 fine. Confiscated assets established his illegally earned funds at RMB 519,795.

As an agent for the BKEX platform, Defendant Dong utilized QR code links and website advertisements to recruit gambling users for the platform. Through his platform activities, Dong received a refund amounting to USD 33,558.54. After his arrest, Dong’s family paid RMB 230,000 in stolen money to authorities. The court imposed one year and six months of prison on him with a parallel suspension term followed by a RMB 35,000 fine. The authorities successfully recovered RMB 223,000 as illegal income from him.

Article 303, paragraph two of the Criminal Law of the People’s Republic of China, was applied, and those operating casinos and related activities were convicted. Officials strengthened their promise to eliminate illegitimate virtual currency-based gambling activities.