Chinese Authorities Bust $20M Bitcoin Laundering Ring

Authorities in Beijing’s Haidian District have dismantled a sophisticated crypto laundering network involving former employees of Kuaishou, one of China’s top short-form video platforms.

The scheme allegedly siphoned off nearly 140 million yuan (roughly $20 million) through manipulated internal subsidy programs and funneled the stolen funds into Bitcoin.

Insiders exploit incentive system

The investigation centers around a Kuaishou staff member—identified by local reports as Feng—who held a key role overseeing incentive disbursements for business partners. Under the guise of rewarding platform contributors, Feng exploited his access to manipulate application processes and share sensitive data with outside collaborators.

By crafting loopholes in a newly launched bonus system, Feng enabled accomplices to file fraudulent submissions. These submissions appeared compliant with company policies, allowing fake operators to illegitimately receive reward payouts. A network of shell companies was created to collect the diverted funds.

Funds converted and laundered via crypto

The embezzled money was rapidly transferred to offshore cryptocurrency platforms—eight in total—where it was converted to Bitcoin in segmented batches. The group used crypto mixers to mask transaction origins, further complicating efforts to trace the funds.

Once the assets were obscured, the Bitcoin was exchanged back into yuan via illicit over-the-counter channels, with the proceeds flowing into accounts controlled by Feng and his network.

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Law enforcement traces and recovers stolen crypto

Despite the operation’s complexity and reliance on privacy tools, Chinese authorities were eventually able to follow the money trail. Their investigation led to the seizure of more than 90 BTC, with the final stages of the laundering process traced back to domestic wallets.

Multiple individuals were charged and convicted for their roles in the scheme, receiving prison sentences ranging from six months to 14 years, depending on the extent of their involvement. Charges included embezzlement, fraud, and illegal fund transfers.

This case highlights how internal access combined with cryptocurrency tools can be weaponized to conduct large-scale corporate theft—and how state agencies are now sharpening their focus on blockchain-enabled financial crime.

Kosta Gushterov

Kosta has been working in the crypto industry for over 4 years. He strives to present different perspectives on a given topic and enjoys the sector for its transparency and dynamism. In his work, he focuses on balanced coverage of events and developments in the crypto space, providing information to his readers from a neutral perspective.