Since June 24, the founder of the Chinese cryptocurrency company RenrenBit, a major investor in Bitfinex and Binance, Zhao Dong has been arrested and is under investigation, journalist Colin Wu confirmed, citing his own sources.
Reports of the arrest of one of China’s largest OTC cryptocurrency traders appeared in early July. Dong’s company denied them.
Wu described the news that Dong was sentenced to 15 years in prison today, September 29, but noted that he did face criminal charges.
According to Wu, Dong is accused of obtaining and concealing criminal proceeds and carrying out illegal business transactions. This is a common practice for the authorities with regard to OTC sellers. The prosecution suggests that they deliberately accepted criminal money, the journalist said.
He recalled that the founder of RenrenBit is an early investor and major shareholder in Binance, who was previously in charge of the exchange’s entire OTC business in RMB.
Dong is also a shareholder in Bitfinex and Tether. In addition to OTC trading, he was engaged in lending and investing, and his connections with the stablecoin issuer allowed Dong to borrow funds from him at a low interest rate, Wu said.
According to the journalist, after the arrest, the businessman’s business “practically stalled.”
Recall that the People’s Bank of China has compiled a blacklist of accounts of large traders of local cryptocurrency OTC platforms. His defendants will lose access to online banking for five years.