Bribes are common in all industries, including the digital assets industry. Here is what a top financial regulator did in China. According to Chinese state television, Yao Qian, the architect behind the digital yuan (China’s CBDC coin), allegedly received over $8 million in crypto bribes.
Chinese investigators found out that Yao amassed 2,000 Ethereum (ETH) and other funds through shell accounts, hardware wallets, and exchange transfers. The crypto funds were claimed to have been used to secure business favors and buy a luxury villa.
Investigators traced the movement of crypto funds from start to finish on the blockchain as part of their broader corruption investigation in China.
China’s digital yuan architect receives bribes worth $8 million
Yao received more than $8 million in bribes, both in the form of cash and cryptocurrency. An integral allegation points toward 2018, when a businessman collected nearly 20,000 Ethereum for an initial coin offering (ICO) project.
Yao Qian reportedly helped the businessman connect the ICO project with an exchange in return for 12 million yuan, which includes 2,000 ETH. In detail, after three years, Yao Qian converted 370 out of 2,000 ETH he received into nearly 10 million yuan, equivalent to about $1.4 million.
Bank transfers are generally easier to trace, and this would add to the reasons why the financial regulator used hardware crypto wallets and multiple shell accounts linked to intermediaries and relatives to conceal the origin and trail of the funds.
Yao Qian: A top voice in China’s digital yuan architecture
Digital yuan is China’s Central Bank Digital Currency (CBDC) issued by the People’s Bank of China (PBOC). Yao played an important role as the first director of the Digital Currency Research Institute at the PBOC and then as a senior regulator at the China Securities Regulatory Commission.
Now, as Yao is at the center of the crypto bribery investigation, the case highlights how emerging fintech can open new corruption risks even if strict regulations exist.
According to BlockFlow, a media company based in Hong Kong, Yao understood the tech better than anyone.
He believed his deep knowledge of blockchain anonymity gave him a superpower: the ability to take bribes that would never be found. He was wrong.
BlockFlow
Are crypto bribes common?
Instances of crypto bribes are relatively fewer when compared to the traditional financial industry. In scenarios like exchange listing, regulation, DeFi, and protocol governance, bribes might be more prevalent, as criminals prefer anonymity and the absence of intermediaries.
However, bribers should be aware that cryptocurrency poses a significant challenge in terms of concealing bribes effectively.
