Chinese court started the trial of crypto OTC trader Zhao Dong with a charge of assisting internet crimes up to three years in jail
According to information from Xihu District Court in the Chinese city of Hangzhou today, China has begun to hear criminal cases against OTC crypto trader Zhao Dong and several others on charges of assisting internet criminal activities.
Trader and RenrenBit co-founder, Zhao Dong
An Hangzhou city district court started the trial of crypto OTC trader Zhao Dong with a charge of assisting internet crimes
Zhao has been one of the most popular figures in the Chinese crypto community since early 2010. For several years, Zhao ran one of the largest OTC groups in China. He is also known for his association with crypto exchange Bitfinex as a minor shareholder and founded RenrenBit, a crypto lending startup.
Zhao and his team are accused of trading partners for a money-laundering scheme called “Day Day Up”. Day Day Up is one of many such schemes in China that’s called a Paofen platform, which, in literal translation, means Point Scoring.
It works like this: a team behind a Paofei platform sets up an app. Users can join the app but will need to provide their AliPay, WeChat Pay, and bank accounts. They can earn commissions by letting the platform use their accounts to send and receive fiat transactions and can also make additional rewards by inviting more people to the platform. The purpose of such a scheme is to use lots of payment accounts to reshuffle transactions and launder money for criminal activities. Thus anyone who joins the app is potentially liable for providing assistance to an internet-based crime.
As reported by the Xinhua News Agency in February, the group behind the Day Day Up plan started operations in 2019 and laundered more than $ 7 billion for its upmarket activities like online gambling within 5 months. through paid accounts provided by more than 70,000 registered users.
In the second half of 2019, the team started to use USDT to upgrade the reform process to try to stay under the watchful eyes of law enforcement. But the report did not specify who was the crypto partner or how much of the proceeds were laundered through USDT. Overall, the report said the Day Day Up platform provided the “Paofei” service for 1,900 cases of online gambling and telecommunication fraud. In the process, 30 billion yuan ($4.6 billion) of proceeds were sent overseas. The Hangzhou police arrested 85 people in May 2020, including the team behind the Day Day Up platform and their crypto trading counterparties.
Zhao Dong is charged with assisting internet criminal activities. This is defined as providing someone known to be committing an internet-based crime with the tools to do so. These include internet access, network storage, telecommunication, or payment settlements.
If found guilty, Zhao could be sentenced to up to three years in jail. He has already been in jail for almost a year. The case has attracted a great deal of attention given Zhao’s status as one of the most prominent figures in the Chinese crypto industry.
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