In Beijing, prosecutors jailed eight people for carrying out a year-long Bitcoin fraud that released 140 million yuan (through $20 million) from a short video platform, before pouring cash into the code.
According to a white paper released by the People’s Deputy of the Heidia district, the incident is one of the most complex anti-corruption cases handled between 2020 and 2024.
Insider Power opened a loophole
Based on the report, an employee named Feng held only control over the service providers of boarding, bonus eligibility and payment authorization.
He quietly tweaked his bonus policy to create a gap that only he and two external helpers, Tan and Yang, could exploit. Fake documents were flown with private data that had fen leaked.
The trio then reroute bonus payments to their make-up accounts rather than rewarding their actual work. By the time the auditor discovered the lack of cash, 140 million yuan had already disappeared.
Fake company and laundry chain
The gang used a shell company that had no actual operation. Yang instructed the King of Associates and others to set up about ten of these paper businesses.
All they did was collect fake bonus payments. From there, he jumped over multiple bank accounts until the funds landed in Yang’s hands. After that, Feng ordered the next step. Convert to Bitcoin.
They split the booty on eight different international platforms, mix coins, and scramble transaction trails to hide the origins of money.
Authorities track Bitcoin flow
Li Tao, prosecutor of the Heidian Science and Technology Crimes Division, has constructed a detailed map of the fraud. By comparing company data logs, bank records and blockchain transfers, his team stripped each layer of concealment.
Over 90 Bitcoins were collected during the investigation. This is enough to prove exactly how a “closed loop” laundry chain works. Each coin recovered was tied to a stolen reward, confirming every twist in the path of money.
The verdict took into account the role of each person. Feng received his longest term in the bar, 14 years and 6 months, while the other seven were given prison sentences ranging from three to 14 years and received more severe fines.
All were found guilty of professional embezzlement. This case serves as a warning. Even the everyday bonus system can become a big scam vehicle if one person holds too much power. And modern cryptographic tools can’t guarantee anonymity forever.
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