Former Chinese Communist Party official pleads guilty for helping crypto miners: State media

A former Chinese Communist Party (CCP) secretary pleaded guilty to corruption charges in the heavily industrialised eastern coastal province of Zhejiang, reported Chinese state media on December 29. Xiao Yi, the former Communist Party secretary of the city of Fuzhou was accused of accepting over 125 million Chinese Yuan ($18 million) in bribes related to construction programs and illegal promotions. He pleaded guilty in the Zhejiang Hangzhou Intermediate People’s Court, the state-owned daily news program Xinwen Lianbo reported.

Xiao Yi did corrupt practices for Bitcoin miners: Chinese state media

In addition to the bribing charges, Yi also pleaded guilty to charges related to transactions with the Bitcoin miners between 2017 and 2021. Xiao Yi was Fuzhou city’s Communist Party secretary between 2008 to 2021. It is unclear if the series of charges were related.

“During his 2017 to 2021 tenure as the Communist Party Secretary of the City of Fuzhou, Xiao Yi provided support to cryptocurrency mining companies in the form of subsidies, capital aid, and electricity assurance. These acts were contrary to national regulations, the theory of New Development, and led to massive losses in public property, leading to adverse consequences,” state-owned daily news program Xinwen Lianbo reported. 

The quantum of the sentence will reportedly be announced at a later session of the Zhejiang Hangzhou Intermediate People’s Court.

Cryptocurrency mining banned in China

Since September 2021, cryptocurrency mining — the process of creating new digital “coins”— remains banned in China. Beijing banned cryptocurrency mining, citing carbon neutrality pledges and “high energy costs”. A law bans access to electricity and capital markets for individuals engaging in the creation of new digital coins. 

The ban, however, has been difficult to enforce. This is due to crypto mining’s decentralised nature. 

In May 2022, cryptocurrency news platform Cointelegraph reported that China is the world’s second-biggest Bitcoin mining hub despite the ban. 

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