Chinese Court Sentences BKEX Employees for Illegal Gambling via Crypto Contract Trading
A Chinese court has ruled that cryptocurrency exchange BKEX operated an illegal gambling platform through its contract trading services, resulting in prison sentences for several employees and agents involved in the operation.
BKEX’s Contract Trading Deemed Illegal Gambling
On January 29, the People’s Court of Pingjiang County, Hunan Province, determined that BKEX’s contract trading model constituted a form of online gambling. The court found that the platform facilitated users in placing high-leverage bets—sometimes up to 1,000x—on cryptocurrency price movements using USDt (Tether), a stablecoin pegged to the US dollar.
While futures trading is a common financial practice that allows investors to speculate on asset prices with leverage, the court ruled that BKEX’s implementation encouraged betting behavior, violating China’s strict anti-gambling laws. As a result, individuals involved in the platform’s operations were found guilty of the crime of “opening a casino.”
The Rise and Fall of BKEX
Founded in 2018 by Ji Jiaming, BKEX initially operated under Chengdu Dechen BiKe TianXia Technology Co. To avoid regulatory scrutiny, Ji frequently changed the company’s registration details until it was ultimately dissolved. In 2021, Ji partnered with Lei Le and established a team in Shenzhen to develop and promote BKEX’s perpetual contract trading feature, which soon became a core part of the exchange’s business.
BKEX quickly gained popularity, attracting over 270,000 users, including 60,000 active traders. Before authorities intervened, the platform had generated more than 54.7 million USDT in profit.
Prison Sentences and Fines for Employees and Agents
Following a thorough investigation, eight individuals faced criminal charges for their involvement in BKEX’s operations.
- Zheng Lei, a former wallet engineer and department head, was convicted for providing technical support to an illegal gambling operation. He received a two-year and one-month prison sentence and a fine of 150,000 yuan ($20,900). Authorities also confiscated his earnings of 1.34 million yuan ($186,600).
- Wang, the head of BKEX’s audit department, managed KYC verification and transaction processing. He was sentenced to one year and 11 months in prison and fined 52,000 yuan ($7,250).
- Dong, an agent responsible for user recruitment, promoted BKEX by distributing QR codes and referral links. He earned $33,558 in commissions before being caught. The court sentenced him to one year and six months in prison (suspended) and fined him 35,000 yuan ($4,880), while also seizing his total earnings of 223,000 yuan ($31,000).
China’s Continued Crackdown on Crypto
The sentencing is part of China’s broader crackdown on cryptocurrency-related activities, which the government views as a threat to financial stability. Over the years, Chinese authorities have imposed a series of strict regulations on crypto:
- 2013 – A ban on banks handling cryptocurrency transactions.
- 2017 – Prohibition of initial coin offerings (ICOs) and centralized exchanges.
- 2021 – A complete crackdown on crypto trading and mining.
The ruling against BKEX reinforces China’s firm stance on cryptocurrency, signaling continued legal action against entities that operate outside the country’s financial regulations.
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