A Chinese court concluded that the bitcoin exchange BKEX operated as an illegal gambling site through its contract trading mechanism, resulting in prison sentences for several workers and agents.
On January 29, the People’s Court of Pingjiang County in Hunan Province ruled that BKEX’s contract trading was a kind of online gambling, and those involved were charged with “opening a casino.”
Authorities discovered that the platform allowed users to speculate on the price movements of Bitcoin, Ether, and other cryptocurrencies with USDT, a stablecoin linked to the US dollar. Traders could use huge leverage—up to 1,000x—to increase both possible gains and losses. The court deemed these activities illegal gambling because they encouraged people to put wagers on financial events.
BKEX, founded by Ji Jiaming in 2018 through Chengdu Dechen BiKe TianXia Technology, is being investigated for illegal cryptocurrency trading. The company has changed its registration details multiple times to avoid detection. By 2021, the company had created and extensively promoted its perpetual contract trading function, which quickly became a critical component of the platform’s success.
At its peak, BKEX had over 270,000 registered members, including 60,000 active traders. The platform generated approximately 54.7 million USDT in profits before authorities shut it down.
Key players received prison sentences.
Several BKEX employees and agents received varying prison sentences and penalties after their conviction.
The authorities sentenced Zheng Lei, a wallet engineer and department director, to 2 years and 1 month in prison and fined him 150,000 yuan ($20,900). The authorities also seized his earnings of 1.34 million yuan ($186,600).
Wang, chief of BKEX’s audit department, was in charge of KYC verification and transaction processing. The court sentenced him to a year and 11 months in prison and fined him 52,000 yuan ($7,250).
China maintains strict rules on digital asset trading, citing illicit crypto activity as a potential threat to financial stability. The recent court verdict against BKEX confirms the government’s steadfast commitment to combatting unlawful financial operations in the digital asset industry.
