The over-the-counter (OTC) cryptocurrency trading desk RenrenBit was founded by Zhao Dong, who is infamous as the ‘OTC King’. Zhao Dong was found guilty of the charges against him in China. In the context of China’s increasing crackdown on criminal operations using cryptocurrencies, this conviction is a significant event that has taken place. In the course of his actions, Zhao was involved in facilitating cryptocurrency and local currency trading, which is considered illegal in the country.
An in-depth investigation that delved into sophisticated financial transactions led to the conviction of the suspect. To build their case against Zhao and his friends, authorities relied on a variety of evidence, including confessions, communications logs, financial records and witness testimony. Zhao and his colleagues attempted to demonstrate that their conduct was limited to digital currency transactions and did not constitute criminal foreign currency trading. The prosecution, on the other hand, presented evidence of foreign currency in their call logs, which was in response to their defense.
As the trial progressed, it became clear that Zhao had received money from individuals in other countries. An elaborate operation was revealed in which Zhao and other individuals in Dubai collected money in the form of dirhams, used these dirhams to purchase Tether, and ultimately allowed local organizations to engage in the illegal resale of Tether for Chinese yuan (RMB). .
The court’s verdict resulted in Zhao convicted up to seven years in prison and a fine of 2.3 million Chinese yuan, which amounts to approximately $325,000. This verdict is illustrative of the strict regulatory stance that China is taking against the trading of cryptocurrencies for financial purposes. Particularly through channels such as over-the-counter (OTC) agencies, private chat groups and transactions using stablecoins such as Tether, the case highlights the dangers associated with participating in cryptocurrency trading in places where it is highly regulated or prohibited.
To carry out his operation, Zhao Dong was responsible for executing complicated trading schemes using the Chinese yuan and other currencies. In conducting their investigation, the researchers focused on the movement of money between Chinese bank accounts, cash pools abroad, and transactions using Tether and Bitcoin. Within the context of one of the schemes, Zhao was responsible for coordinating crypto-fiat transfers between companies in Dubai and domestic Chinese connections. This demonstrates a large network of financial activities spanning many countries.
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