China sentences former official to life in prison for role crypto mining operation

A former party official in China has been sentenced to life in prison for his role in supporting cryptocurrency mining.

Xiao Yi, former vice-chairman of the Jiangxi provincial committee of the Chinese People’s Political Consultative Conference and former Communist Party chief of Fuzhou city was accused of providing fiscal, capital, and electricity-related support to local crypto mining firms.

He also helped local cryptocurrency mining companies hide their activities by masquerading as big data and cloud computing businesses, and instructed companies to “put up a performance” during visits and inspections by other government officials.

Prosecutors also say that Xiao “covered up” the mining operation by instructing relevant departments to fabricate statistical reports and adjust the classification of electricity. The mining operation, which used 160 thousand crypto mining rigs, apparently accounted for 10 per cent of Fuzhou’s total electricity consumption from 2017 to 2021.

For these actions, Xiao was charged with abuse of power. The court deemed these abuses of power “exceptionally serious”.

China has previously cracked down on crypto mining in 2021, as well as banning trading of cryptocurrencies.

Thus far, Xiao is the most senior official to be charged for crypto-related crimes. Earlier this month, another Chinese national was sentenced to nine months in prison for helping an acquaintance purchase US$13 thousand worth of USD Tether, profiting US$ 20 from the transaction.