Outside Source
A Chinese court found BKEX’s crypto contract trading functioned as illegal gambling, sentencing employees to prison for facilitating unauthorized betting.
News
A Chinese court ruled that cryptocurrency exchange BKEX engaged in illegal gambling through its contract trading platform and sentenced several employees and agents to prison for their roles in the operation.
The People’s Court of Pingjiang County, Hunan Province, on Jan. 29 determined that BKEX’s contract transactions functioned as a form of online gambling, and those involved were accomplices in the crime of “opening a casino.”
According to the ruling, BKEX allowed users to place bets using USDt (USDT), a stablecoin pegged to the US dollar, and apply high leverage — up to 1,000x in some cases — to wager on the price movements of Bitcoin (BTC), Ether (ETH) and other cryptocurrencies.
Chinese crypto platform caught up in legal dispute
Futures trading is a type of financial contract where buyers and sellers agree to trade an asset at a set price on a future date. In crypto, it allows traders to speculate on price movements using leverage, amplifying both potential gains and losses.
The court found that these activities constituted illegal gambling under Chinese law, as they involved gathering people to place bets on financial outcomes.
The judgment documents reveal that Ji Jiaming, the platform’s founder, launched BKEX in 2018 through Chengdu Dechen BiKe TianXia Technology Co. He repeatedly changed the company’s registration to evade scrutiny until it was ultimately dissolved. In 2021, Ji partnered with Lei Le, forming a team in Shenzhen to develop and promote the perpetual contract trading function, which became a key part of BKEX’s operations.
BKEX’s contract trading gained traction, reaching over 270,000 users, including 60,000 active traders, and generating more than 54.7 million USDT in profit before authorities intervened.
Related: AI tokens pump as Franklin Templeton says agents will ‘revolutionize’ social media
Employees and agents sentenced
A total of eight individuals faced criminal charges.
Zheng Lei, a former wallet engineer and department head, was convicted for providing technical support to a gambling operation. The court sentenced him to two years and one month in prison and a fine of 150,000 yuan ($20,900). His earnings of 1.34 million yuan ($186,600) were confiscated.
Wang, the head of BKEX’s audit department, was responsible for KYC verification and processing transactions. The court sentenced him to one year and 11 months in prison and a fine of 52,000 yuan ($7,250).
Dong, an agent who recruited users by distributing QR codes and referral links, earned $33,558 in commissions from BKEX. The court sentenced him to one year and six months in prison (suspended) and a fine of 35,000 yuan ($4,880). His earnings of 223,000 yuan ($31,000) were also confiscated.
The ruling is part of China’s ongoing crackdown on cryptocurrency-related activities, which the government considers a threat to financial stability.
The government has repeatedly banned crypto, including a 2013 ban on banks handling crypto, a 2017 ban on ICOs and exchanges, and a 2021 crackdown on trading and mining.
Magazine: You should ‘go and build’ your own AI agent: Jesse Pollak, X Hall of Flame
This article first appeared at Cointelegraph.com News
