The over-the-counter (OTC) cryptocurrency buying and selling desk RenrenBit was based by Zhao Dong, who’s notoriously often called the “OTC King.” Zhao Dong was discovered responsible in China of the fees in opposition to him. Within the context of China’s growing crackdown on legal operations utilizing cryptocurrencies, this conviction is a significant occasion that has taken place. In the middle of his actions, Zhao was concerned within the facilitation of cryptocurrency and native forex buying and selling, which is taken into account to be illegal within the nation.
An in-depth investigation that dug into refined monetary dealings led to the conviction of the defendant. To construct their case in opposition to Zhao and his associates, the authorities relied on a wide range of proof, together with confessions, communication logs, monetary data, and testimony from witnesses. Zhao and his colleagues made an effort to reveal that their conduct have been restricted to transactions involving digital forex and didn’t represent legal buying and selling in overseas change. The prosecution, however, offered proof of overseas change of their dialog logs, which was a response to their protection.
Because the trial progressed, it grew to become clear that Zhao had obtained cash from people from different nations. A complete operation was revealed wherein Zhao and different people in Dubai gathered funds within the type of dirhams, used these dirhams to buy Tether, and ultimately made it doable for native organizations to have interaction within the illicit resale of Tether for Chinese language yuan (RMB).
The decision of the court docket resulted in Zhao being sentenced to seven years in jail and being needed to pay a high quality of two.3 million Chinese language yuan, which is equal to round $325,000. This verdict is illustrative of the stringent regulatory place that China takes in opposition to the commerce of cryptocurrencies for monetary functions. Notably through channels akin to over-the-counter (OTC) desks, personal discussion groups, and transactions utilizing stablecoins akin to Tether, the case highlights the hazards which are related with taking part in cryptocurrency buying and selling in locations the place it’s strongly regulated or outlawed.
As a way to perform his operation, Zhao Dong was accountable for finishing up intricate buying and selling schemes utilizing the Chinese language yuan and different currencies. When conducting their investigation, the investigators targeted their consideration on the motion of funds between Chinese language financial institution accounts, money swimming pools positioned overseas, and transactions utilizing Tether and Bitcoin. Inside the context of one of many schemes, Zhao was accountable for coordinating crypto-fiat transfers between companies positioned in Dubai and home Chinese language connections. This demonstrates a big community of economic actions that spans many countries.
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