China’s Supreme Procuratorate recently unveiled the sentencing details of Zhao Dong, the founder of RenrenBit, an over-the-counter (OTC) cryptocurrency trading platform. Zhao, often referred to as the "Off-site King," has been handed a seven-year prison term for running an unlicensed cryptocurrency business and engaging in foreign exchange transactions. This development underscores the persistent crackdown on cryptocurrencies, which remain prohibited in the country. The authorities conducted an extensive investigation into intricate financial dealings, scrutinizing accounts connected to the alleged offenses. Bank records, communication logs, confessions, and witness statements were used to construct the case against Zhao and his associates.
During three public hearings, Zhao and his associates argued that their activities didn’t constitute foreign exchange transactions but rather involved digital currency transactions, which they claimed weren't illegal operations. However, prosecutors presented evidence from chats between Zhao and his team that indicated involvement in foreign exchange. Multiple beneficiaries confirmed that the funds Zhao received originated from overseas sources. The official report stated:
"All the defendants acknowledged that Zhao and others received cash in dirhams while in Dubai, transferred RMB to the counterpart's designated account, utilized dirhams to purchase Tether, and subsequently orchestrated illicit sales in RMB through domestic entities."
Consequently, the court handed down a seven-year prison sentence to Zhao and imposed a fine of 2.3 million yuan ($325,000).
