A Chinese court concluded that BKEX broke Chinese gambling rules by operating an illegal trading platform and sentenced company staff to prison.
Pingjiang County’s People’s Court concluded that BKEX formed an illegal gambling service from its exchange contracts during the examination on January 29. Under Chinese law the court determined BKEX managers and staff operated an illegal gambling facility.
The Rise and Fall of BKEX’s Trading Platform
The legal judgment stated BKEX helped customers place bets with stablecoin USDt which stays tied to the value of US dollars. Through their platform users could make investments worth 1,000 times or more to bet on BTC, ETH and several cryptocurrency price fluctuations.
When buyers and sellers use futures trades to set future asset prices in cryptocurrency they turn speculation into a common market practice. The court determined BKEX’s operations met the legal definition of gambling because users betted on economic results.
Public records demonstrate that BKEX founder Ji Jiaming started the trading platform in 2018 through Chengdu Dechen BiKe TianXia Technology Company. Ji kept switching BKEX’s company registration to avoid law enforcement until the business formally ended operations.
In 2021 Ji Jiaming joined powers with Lei Le in Shenzhen to prepare and market perpetual contract trading which soon became a main service function of BKEX. During the time of its success BKEX attracted 270,000 users 60,000 of them regularly traded contracts. The system made 54.7 million USDT until officials stopped its operations.
Legal Consequences for BKEX Employees
Eight people had to face legal consequences because of this matter. After assisting with gambling operations Zheng Lei as former wallet engineer and department head received 26-months of imprisonment and 150,000 yuan ($20,900) fine from the Chinese authorities. Officials seized his bank account balance of 1.34 million yuan which matched $186,600.
As the BKEX audit department leader Wang served one year and eleven months in prison plus paid 52,000 yuan ($7,250) in fines for controlling KYC identification and financial operations. As per court requirements Dong received one year of suspended sentence plus 35,000 yuan fine after making $33,558 in commissions as a recruiter using QR codes and referral links.
Authorities took away both 223000 yuan ($31000). The court ruling continues China’s struggle against crypto-related behavior because the government regards it as dangerous for financial peace. Authorities took strict measures to control crypto starting with their 2013 order for banks to avoid dealing with crypto activities then added prohibitions on ICOs and exchanges in 2017.
China made strong moves during 2021 when it banned all trading and mining activities involving cryptocurrencies. Under growing regulatory surveillance China does not change its rule to restrict unauthorized financial dealings involving cryptocurrencies.
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