- A Chinese official was sentenced for selling state secrets.
- The official reportedly lost a fortune on crypto trading.
- China sees crypto as a major corruption risk.
Ever since the industry gained prominence, China has been looking at crypto with suspicion. A recent case highlights their concerns, as a young official received a life sentence for selling state secrets for crypto payments. The reason is reportedly his debts from losses in crypto.
This case reveals two sides of Chinaโs skepticism over crypto. For one, crypto exposes citizens to substantial risk of financial losses. At the same time, crypto payments help fuel its growing corruption problem.
Crypto Losses Reportedly Lead Chinese Official into Espionage
A recent case highlights the Chinese governmentโs fears of crypto. On Thursday, November 7, the Chinese Ministry of National Security revealed that an official was sentenced to life in prison for espionage.
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According to a public press release, Wang Moumou, a young state official, corresponded with foreign security agencies. Chinese authorities claim that the man sold state secrets to foreign intelligence agencies for crypto payments.
The motivation for the state official, according to authorities, was substantial debt due to crypto trading. Wang lost a substantial amount of money on crypto trades and was lured into selling state secrets. Reports suggest that Wang was uneasy at first, but was ultimately tempted with the amount of money he received as crypto payments.
Corruption Case Aligns with Chinese Fear of Crypto
The latest corruption case highlights Chinaโs fear of crypto on two different levels. For one, the case highlights the perceived risk of crypto worsening Chinaโs corruption problems. At the same time, it plays into Chinaโs fear of exposing its public to losses from crypto.
Several recent cases emerged of Chinese public officials accepting bribes in crypto. The corrupt officials typically receive cold wallets, sometimes in the form of USB sticks, in exchange for favorable treatment of the other parties.
Chinese officials have repeatedly warned the public of the inherent risks of crypto investments. The unregulated nature of crypto means that retail investors are exposed to significant risks. Notably, the investor protections that exist for publicly traded companies donโt exist in crypto. China also warned about the numerous scams in the sector.
On the Flipside
- In 2021, China imposed a blanket ban on all crypto mining and transactions. However, the main motivation at the time appeared to be the growing electricity demands of crypto mining.
- Recently, there have been several unverified reports that China is preparing to lift its ban on crypto. Some of these claims came even from figures such as Tronโs Justin Sun. These claims should be taken with skepticism.
Why This Matters
The latest crypto corruption case aligns almost perfectly with Chinaโs official hostile narrative on crypto. It suggests that Chinese official attitudes toward crypto remain largely negative.
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