Involvement in facilitating cryptocurrency mining operations has led to a life imprisonment sentence for Yi Xiao, a former member of the Chinese Communist Party (CCP), as decreed by a Chinese court in response to corruption charges. Yi Xiao, who previously held the position of vice chairman within the Jiangxi provincial committee of the People’s Political Consultative Conference, has also been found guilty of abusing his power. The court’s verdict stemmed from his acceptance of over 125 million yuan ($17.1 million) in bribes spanning from 2008 to 2021.
Additionally, while serving as the party secretary of Fuzhou City, Xiao provided assistance to companies engaged in digital asset mining, a prohibited activity in China. The court stated that these actions resulted in substantial losses to public assets and the interests of the nation and its people. Consequently, Xiao has been sentenced to life imprisonment, along with a revocation of all his political rights and the confiscation of his personal assets.
China’s Evolving Stance on Cryptocurrency
China’s historical relationship with digital asset’s has been marked by turbulence. As far back as 2013, the nation initiated measures to distance itself from crypto, prohibiting banks from engaging in crypto transactions. Subsequently, in 2017, China extended its restrictions by banning Initial Coin Offerings (ICOs), a move intended to bolster the national currency, the yuan, and curtail the illicit outflow of funds.
By 2019, the focus shifted to Bitcoin (BTC) mining, with the National Development and Reform Commission (NDRC) designating BTC mining as “undesirable.” This signaled the government’s apprehensions about the practice. The year 2020 witnessed an intensified crackdown on the burgeoning crypto sector, as the People’s Bank of China (PBoC) revealed its intent to block more than 100 foreign websites providing crypto exchange services.
Nevertheless, it wasn’t until 2021 that China’s ban on crypto mining became fully operative. Prior to this, provinces such as Inner Mongolia, Xinjiang, and Sichuan had functioned as significant Bitcoin (BTC) mining centers, collectively contributing to nearly half of the global BTC mining power. The definitive blow materialized in September 2021 when the country chose to enact a comprehensive prohibition on crypto mining activities.