Chinese court convicts BKEX executives for illegal gambling

Sankunni K January 30, 2025
Chinese court convicts BKEX executives for illegal gambling

A Chinese court has sentenced several employees and agents of cryptocurrency exchange BKEX for operating illegal gambling services through its contract trading platform. The verdict, delivered by the People’s Court of Pingjiang County in Hunan Province on 29 January 2025, found that BKEX’s contract trading operations violated China’s strict anti-gambling laws. As a result, multiple individuals received prison sentences and fines.

How BKEX’s trading model violated the law

BKEX, a cryptocurrency exchange launched in 2018, allowed users to participate in highly leveraged trading—up to 1,000 times their initial stake—using Tether (USDT). Traders essentially bet on price movements of cryptocurrencies like Bitcoin (BTC) and Ethereum (ETH). The court ruled that these activities constituted gambling rather than legitimate financial trading.

Chinese authorities viewed BKEX’s trading model as an organised betting system, thereby classifying it as an illegal gambling operation. The crackdown aligns with China’s long-standing restrictions on crypto-related activities, which aim to protect financial stability and prevent illicit transactions.

Role of BKEX executives and agents

The investigation revealed that BKEX’s founder, Ji Jiaming (featured in the image above), established the exchange through Chengdu Dechen BiKe TianXia Technology. He frequently changed the company’s registration details to evade regulatory scrutiny. In 2021, he partnered with Lei Le to introduce perpetual contract trading, which became a core feature of BKEX’s operations.

Before authorities intervened, BKEX had amassed over 270,000 registered users, with 60,000 actively trading. The exchange generated more than 54.7 million USDT in profits from contract trading alone.

Sentences and financial penalties

Several key individuals involved in BKEX’s operations received jail terms and monetary fines:

Zheng Lei, a former wallet engineer and department head, was sentenced to two years and one month in prison and fined 150,000 yuan ($20,900). Authorities also confiscated his earnings of 1.34 million yuan ($186,600).

Wang, head of BKEX’s audit department responsible for verifying users’ identities and processing transactions, received a one-year and 11-month prison term along with a fine of 52,000 yuan ($7,250).

Dong, an agent who recruited users through QR codes and referral links, received a suspended sentence of one year and six months. He was fined 35,000 yuan ($4,880), and his commission earnings of 223,000 yuan ($31,000) were seized by authorities.

China’s continued crackdown on Crypto

China has been enforcing strict regulations against cryptocurrency activities for over a decade. The government first banned banks from handling crypto transactions in 2013. Later, in 2017, it prohibited initial coin offerings (ICOs) and shut down local exchanges. The most comprehensive crackdown came in 2021 when authorities banned all crypto trading and mining operations.

The sentencing of BKEX employees is a continuation of China’s broader efforts to eliminate crypto-related financial risks. The Xi Jinping-led government in China remains firm in its stance that digital assets pose a threat to economic stability, leading to stringent enforcement measures against platforms that attempt to operate outside the law.

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