China declares crypto futures trading illegal gambling in major rulings

The People’s Court in Pingjiang County, Hunan province classifies futures trading on crypto exchanges as gambling.

The ruling has resulted in several BKEX exchange employees and external promoters being accomplices in the crime of opening casinos. However, most of the sentences were eventually interrupted.

Bkex Exchange and Gambling Claims

Founded in 2018 by Ji Jiaming, Bkex Exchange is at the heart of this incident. The Wu blockchain reported that Ji Jiaming is running, citing a recently published criminal ruling.

Bkex Exchange was originally Chengdu Dechen Bike Tianxia Technology Co., Ltd. was founded under the company and promoted cryptocurrency spot trading, which later expanded into futures trading. Specifically, between July 2019 and January 2022, the company changed its registered name multiple times during its final disbandment. By 2021, BKEX introduced a permanent contract trading feature, allowing users to take advantage of bets using USDT Stablecoin.

The court found the transaction model to be equivalent to gambling, according to the report. The court said it encouraged speculation that Bitcoin (BTC) and Ethereum (ETH) prices would be 1,000 times higher.

“Bkex has brought people together for gambling over the internet,” local media reported citing the court’s ruling.

Ji Jiaming reportedly worked with Lei Le due to a lack of operational expertise. LeiLe founded a team at Deep Shenzhen, who is responsible for running the contract trading module. The contract split the net profit, with 58% sent to Jiaming’s Chengdu team and 42% sent to Lei’s Deep Shenzhen business.

The court revealed that BKEX had more than 270,000 users participating in the contract transaction, generating a net profit of $54.7 million (approximately 300 million yuan). With founder Ji Jiaming still being large, the exam focused on employees and agents. Of the eight defendants designated in court documents, two were employees and six were agents.

One of the convicted individuals, Zheng Lei, served as wallet engineer and head of the wallet division. He was sentenced to 25 months in prison, suspended for the same period and fined 150,000 yuan (almost $30,000). The court also confiscated 1.34 million yuan of illegal revenue.

Wang, another employee who oversaw KYC authentication and cryptocurrency trading, received a 23-month suspension sentence with a fine of 52,000 yuan (nearly $10,000). Additionally, agents like Don who recruited users for the platform have been convicted.

For example, Don developed over 10,000 subagents and won 33,558 USDT in rebates before winning.

China’s growing crypto regulations

This domination coincides with China’s continued crackdown on dangerous cryptocurrency activities. Recently, the Chinese government has introduced stricter banking regulations to curb illegal crypto transactions, strengthening its long-standing stance on speculative investment in digital assets.

However, China’s regulatory playing field remains complicated. The recent court ruling treated cryptocurrency transactions as gambling, but the prior decision by the Chinese High Court recognized cryptocurrency as legal property and granted the status of the goods. . This apparent contradiction underscores the growing nature of China’s approach to digital assets.

Despite regulatory crackdowns, cryptocurrency adoption continues to thrive in China. The country remains a major player in the global crypto market. As Beincrypto reported, Asia is the world’s leading adoption. This accounts for 60% of the world’s crypto users. Reports suggest that Chinese investors are often actively involved in digital asset trading, through decentralized platforms and overseas exchanges.

Nevertheless, the court’s decision to classify crypto futures transactions as gambling could have broad implications for China’s digital asset industry. It sets a more stringent enforcement precedent for exchanges offering leveraged transactions. This will allow more platforms to be driven underground and businesses can be moved overseas.

Given the legal risks associated with crypto-related employment in China, the ruling could prevent experts from working in the sector. For now, the future of crypto trading in China remains uncertain, balancing regulatory crackdowns with undeniable market demand for digital assets.