- BKEX executives sentenced for illegal crypto gambling.
- China enforces stricter crypto laws, labeling leveraged trading as gambling.
A Chinese court has ruled that cryptocurrency futures trading constitutes illegal gambling, convicting multiple employees. Agents of BKEX, a crypto exchange that amassed over 270,000 users and generated $54.7 million (300 million yuan) in profits before authorities intervened.
The People’s Court of Pingjiang County, Hunan Province, ruled that BKEX’s contract trading allowed users to place highly leveraged bets—up to 1,000x—on cryptocurrency price movements using USDT (Tether). The ruling classified these transactions as gambling under Chinese law.
Wu Blockchain announced on X that the sentences and court verdict.
“The core point is to define BKEX’s contract transactions as online gambling, and the agents and employees of BKEX exchange are defined as accomplices in the crime of opening a casino, but in the end, they were basically sentenced to suspended sentences.’
Convictions and Penalties for BKEX Employees
With BKEX founder Ji Jiaming still at large, authorities turned their ruling verdict to key employees. Agents involved in the exchange’s operations. A total of eight individuals faced criminal charges, receiving varying sentences and financial penalties.
Zheng Lei, former wallet engineer and department head, received two years and one month in prison and a 150,000 yuan ($20,900) fine, which was already paid. Authorities also confiscated his 1.34 million yuan ($186,600) in earnings. Wang, BKEX’s head of audit and compliance, was sentenced to one year and 11 months and fined 52,000 yuan ($7,250) for his role in KYC verification.
Dong, an agent who recruited over 10,000 sub-agents, earned 33,558 USDT ($31,000) before turning himself in. He was handed a one-year, six-month suspended sentence and fined 35,000 yuan ($4,880).
China Tightens Crypto Regulations with Gambling Ruling
China has a long history of tightening restrictions on cryptocurrency. It banned banks from handling crypto transactions in 2013, outlawed ICOs and exchanges in 2017, and shut down mining operations in 2021.
Despite these measures, China remains a major player in the global crypto market, with traders using decentralized platforms and offshore exchanges. However, the BKEX ruling sets a new precedent that could push more crypto operations underground.
Legal experts point to contradictions in China’s regulatory approach. While courts now classify leveraged crypto trading as gambling, the High Court previously recognized cryptocurrencies as legal property.
A Beijing-based financial analyst noted:
“This ruling creates further uncertainty for crypto firms. The government’s stance remains inconsistent, making it difficult for exchanges to operate legally.”
With China continuing to enforce stricter banking measures against crypto-related transactions, the BKEX case signals a harsher crackdown on leveraged trading, reinforcing the risks for digital asset platforms operating in the region.
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