BKEX Exchange and the Gambling Allegations: BKEX exchange employees and external promoters were convicted for futures trading classified as gambling by the People’s Court of Pingjiang County, Hunan Province. China’s Growing Crypto Regulations: China continues its crackdown on risky cryptocurrency activities with a recent court ruling categorizing crypto futures trading as gambling, impacting the digital asset industry in China. The People’s Court of Pingjiang County, Hunan Province, has classified futures trading on a crypto exchange as gambling, resulting in the conviction of several BKEX exchange employees and external promoters as accomplices in the crime of opening a casino. Most sentences were suspended.

The BKEX exchange, founded by Ji Jiaming, was central to the case, with Jiaming currently on the run. The court determined that BKEX's perpetual contract trading function amounted to gambling, encouraging speculation on Bitcoin and Ethereum price movements with leverage as high as 1,000 times. The court revealed that BKEX had over 270,000 users participating in contract trading, generating a net profit of over $54.7 million.

This ruling aligns with China’s ongoing crackdown on risky cryptocurrency activities, indicating potential implications for the digital asset industry in China. The People’s Court of Pingjiang County, Hunan Province, has classified futures trading on a crypto exchange as gambling. The ruling has resulted in the conviction of several BKEX exchange employees and external promoters as accomplices in the crime of opening a casino. However, most of the sentences were ultimately suspended.

BKEX EXCHANGE AND THE GAMBLING ALLEGATIONS

The BKEX exchange, founded in 2018 by Ji Jiaming, is central to the case. The exchange was initially established under Chengdu Dechen BiKe TianXia Technology Co., Ltd., facilitating cryptocurrency spot trading, which later expanded into futures trading. By 2021, BKEX introduced a perpetual contract trading function, allowing users to leverage their bets using USDT stablecoin. The court stated that this trading model amounted to gambling as it encouraged speculation on Bitcoin and Ethereum price movements with leverage as high as 1,000 times.

Reportedly, due to a lack of operational expertise, Ji Jiaming collaborated with Lei Le, who established a team in Shenzhen responsible for running the contract trading module. The court revealed that BKEX had over 270,000 users participating in contract trading, generating a net profit of over $54.7 million (approximately 300 million yuan). With the founder, Ji Jiaming, still at large, the trial focused on employees and agents.

One of the convicted individuals, Zheng Lei, received a 25-month suspended prison sentence and a fine of 150,000 yuan. Another employee, Wang, received a 23-month suspended sentence with a fine of 52,000 yuan. Additionally, agents like Dong, who recruited users to the platform, were also convicted.

CHINA’S GROWING CRYPTO REGULATIONS

This ruling aligns with China’s ongoing crackdown on risky cryptocurrency activities. Recently, the Chinese government introduced stricter bank regulations to curb illicit crypto trading, reinforcing its stance against speculative investments in digital assets. Despite regulatory crackdowns, cryptocurrency adoption continues to thrive in China, with Asia leading the world in adoption.

Overall, China’s approach to digital assets remains complex, as seen with the recent ruling treating crypto trading as gambling while a prior ruling recognized cryptocurrencies as legal property. This apparent contradiction highlights the evolving nature of China’s regulatory landscape in the digital asset space.