Chinese authorities have jailed an executive at a technology company for embezzling about $20 million (£15m) and converting it into Bitcoin to launder it.

Local media did not name the tech company, but sources outside of China reported that it was Kuaishou, China’s second-largest short video platform and the main rival to TikTok.

An executive at the company surnamed Feng worked with several other employees to carry out a complex embezzlement scheme to steal 140m yuan ($20m, £15m) in corporate funds, sending the monies to overseas shell companies, state-run newspaper the People’s Daily reported.

Money laundering

The employees converted the funds into Bitcoin and used cryptocurrency mixing services and multi-hop wallets to obscure the origin of the funds, the report said.

Finally the Bitcoin were converted back into Chinese yuan through underground channels, and were deposited in mainland Chinese bank accounts under the control of the conspirators.

Investigators were, however, able to follow the complex trail and eventually recovered some 92 Bitcoin, worth about $11.7m, through a combination of forensic blockchain analysis and international cooperation.

Feng was sentenced to more than 14 years in prison, with the others receiving a range of jail terms.

The case highlights the white-collar crime in mainland China as well as the country’s substantial black-market trade in cryptocurrency, which has been strictly prohibited since 2021.

Two years ago, local Chinese media publicised the case of a former Chinese official who was convicted of helping a cryptocurrency mining company cover up its activities and even helping it raise government funding.

During a crackdown in early 2021 crypto mining activity fell to zero in mainland China, but it returned by the end of that year, according to findings from, the Cambridge Centre for Alternative Finance (CCAF).

Crypto economy

Mainland China users also made up 8 percent of the customer base of crypto exchange FTX when it collapsed in 2022, in spite of China’s cryptocurrency ban, according to an FTX bankruptcy filing in November 2022.

Chinese authorities do however hold substantial cryptocurrency assets that have been seized during police operations, and regularly liquidate such holdings through licensed exchanges in Hong Kong, where virtual asset trading is permitted.

Hong Kong has instituted official cryptocurrency rules in an effort to create a regulated crypto industry.