Jian Wen was sentenced to six years and eight months in prison for his role in a Bitcoin (BTC) money laundering scheme.
On October 31, 2018, police searched Wen's home and found and seized a wallet containing 61,000 bitcoins, the value of which had soared from £1.4 billion to more than £3 billion ($4 billion) at the time.
Wen, 42, is said to have been recruited by Yadi Zhang (aka Chi-Minh Qiang, or “Crypto Queen”) to act as a “front man” for the operation.
Zhang is accused of defrauding 130,000 Chinese investors out of $5.6 billion between 2014 and 2017, and was reportedly arrested in the UK earlier this month.
Wen attempted to buy luxury properties in London, including a £23.5 million mansion in Hampstead and a £12.5 million property with luxury amenities. These transactions attracted anti-money laundering checks and the purchases were cancelled after Wen was unable to explain the origins of his BTC.
Wen said at his trial that he was unaware of the funds' illicit origins and simply wanted to improve the lives of himself and his son. Prosecutors argued that he was acting out of personal financial interest.
Wen was not charged with involvement in the original fraud.
In March last year, a jury found Weng guilty of money laundering involving 150 BTC, valued at around £8 million ($10 million).
Judge Sally Ann Hales found that more than 128,000 investors contributed 40 billion yuan (about $5.6 billion) to the scheme.
“Some of the proceeds from this scam were converted into Bitcoin, transferred to cryptocurrency wallets and smuggled out of China on laptops,” she explained.
Despite earning just £12,800 ($16,200) in 2015 and £5,979 ($7,600) in 2016, Wen upgraded to a six-bedroom property in London in 2017, for which he is paying more than £17,000 ($21,600) per month.
Mr Wen and his employer ran an international jewellery business for which he allegedly acted as a “front person”, and also helped fund Mr Wen's son to move from China to Britain to attend a private school, and bought two properties in Dubai.
According to a CPS press release, Wen is accused of converting a “substantial amount” of Bitcoin into cash and other assets on behalf of his employer.
Crackdown on cryptocurrency money laundering
Cryptocurrency money laundering has a significant impact on investors by undermining the integrity of the digital asset market.
Criminals use cryptocurrencies' relative anonymity to launder proceeds from a variety of crimes, including cybercrime, fraud, and theft.
Daren Li and Yicheng Zhang were arrested for allegedly laundering at least $73 million through shell companies linked to a cryptocurrency investment scheme, crypto.news recently reported.
Their activities included overseeing an international syndicate laundering proceeds from cryptocurrency investment scams.
Victims were tricked into transferring millions of dollars to US bank accounts using shell companies.
The funds were then transferred to various bank accounts and cryptocurrency platforms both domestically and internationally in an effort to obscure their origin, nature, ownership and control.
Li and Zhang were charged with money laundering and conspiracy to commit international money laundering, highlighting the ongoing efforts to combat illegal activity in the cryptocurrency sector.
