The CEO is facing charges of participation in a money laundering scheme through his RenrenBit platform. According to the investigations, there is more than USD 7,000 million laundered with this method.

In May 12, 2021, the trial against Zhao Dong, CEO of the RenrenBit loan platform, began its process in the courts of the city of Hangzhou, China.  The CEO is accused of illegal activities related to the Internet by the government of that country; the penalty could be up to three years in prison and other financial fines.

Specifically, the accusations on the CEO reflect on having provided technologic services such as internet access, network storage, telecommunications, advertising, and payment methods to an individual that already knew that he was into all these illegal activities online.

According to an official report in February, the case would also include the laundering of USD 7,000 million related to online gambling and telecommunications fraud since 2019. In a period of this process, the cryptocurrency Tether (USDT) served as a tool to optimize the operation of the scheme.

The Xihu district court points its accusations at Zhao and his associates because of its participation in a money laundering scheme called Day Day Up, the main perpetrators were arrested in May 2020, according to TheBlock. The crime happened on a platform “borrowing” the AliPay or WeChat accounts of its users to make little transactions in fiat money, activity that helped laundering the money.

Zhao Dong had been arrested in July 2020, and remained deprived of his liberty until now. At that time, users of social networks assured that the Chinese Justice was behind the activities of OTC traders with a systematic method to intensify their operations.

Zhao Dong, a Guideline for Cryptocurrencies on Chinese Territory

This case has been awakening the interest of the cryptocurrency community because Zhao has been one of the most famous OTC traders in the Chinese region for several years. RenrenBit, the company he founded and currently chairs, is one of the biggest OTC cryptocurrency exchange and lending platforms in China. Also, Zhao was a shareholder of the Bitfinex exchange, although it is unclear if he will continue to lead the company after these legal struggles.

OTC markets are those parallel to the traditional stocks or debt securities, in which the parties involved, establish “tailor-made” agreements. OTC is the acronym for Over the Counter.  Due to the regulations that China has imposed on cryptocurrencies in recent years, these platforms became a good alternative method to access the crypto-asset market.

Back In 2019, Two official announcements in Shanghai and Beijing reflected a new rise of regulatory pressures on bitcoin and other cryptocurrencies in China.

This Friday, November 22, the office of the People’s Bank of China (PBOC) in Shanghai, posted a statement to create an update on its regulations to restrict cryptocurrencies in that area, but in Beijing, just few days ago, local financial authorities highlighted the illegality of cryptocurrency exchange operations.

By: Jenson Nuñez


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