China Court Rules Crypto Futures Trading as Illegal Gambling
A Chinese court has ruled that crypto futures trading is illegal gambling, impacting BKEX, a crypto exchange. This decision marks a significant development in China's crackdown on digital assets.
Court Ruling Details
- The People’s Court of Pingjiang County found BKEX's perpetual contract trading encouraged high-risk speculative betting.
- Users could leverage up to 1,000x and deposit USDT as collateral to wager on cryptocurrency price movements.
- The court equated the trading structure with gambling operations.
- BKEX operated a multi-level agent system, recruiting users and creating an illegal gambling network.
Convictions of BKEX Employees
- Zheng Lei, former wallet engineer, received a suspended sentence of two years and one month, fined RMB 150,000, with RMB 1.34 million confiscated.
- Wang, head of the audit department, was sentenced to one year and eleven months and fined RMB 52,000 for providing financial services to the platform.
- Agent Dong faced a suspended sentence of one year and six months for promoting BKEX.
- BKEX founder Ji Jiaming remains at large, linked to the platform's contract trading operations.
Implications for Crypto Regulation
- This case highlights China's strict stance on crypto trading since the ban on digital asset transactions and mining in 2021.
- The ruling suggests that leveraged trading is viewed as illegal gambling, not legitimate finance.
- Further crackdowns on digital asset platforms in China may follow.