Beijing Bust Exposes 140m Yuan Kuaishou Bitcoin Laundering Ring

Uncovering the Kuaishou Bitcoin Laundering Scandal

Authorities in Beijing’s Haidian District have dismantled a sophisticated Bitcoin laundering operation. Investigators allege that several employees of Kuaishou, a leading Chinese short-form video platform, conspired to embezzle around 140 million yuan (approximately $20 million) in business development incentives.

The scheme was masked within the company’s legitimate subsidy policies, which reward operators and service providers. Unusual application patterns triggered suspicions, leading to months of undercover surveillance and digital forensics.

How the Simulated Subsidy Scheme Operated

The laundering ring centred on one senior employee, identified by local media as Feng, who held authority over incentive approvals and policy formulation. By manipulating approval workflows and exploiting policy gaps, Feng created opportunities for fraudulent claims.

Key elements of the scheme included:

Policy manipulation – deliberate loopholes introduced during the rollout of a new bonus programme.
Data leakage – internal subscriber information sold or shared with external collaborators.
Falsified applications – shell companies and bogus participants masked as eligible service providers.

Once applications were approved, funds were routed through shell entities to conceal their origins. From there, the conspirators converted the stolen yuan into Bitcoin via offshore exchanges.

From Yuan to Bitcoin: The Laundering Pathway

After siphoning corporate funds, the group embarked on a multi-stage laundering process:

Create shell companies to receive subsidy payments.
Transfer funds to eight offshore crypto exchanges under false identities.
Convert yuan into Bitcoin in multiple batches to avoid detection.
Employ mixing services to obfuscate transactional trails.
Convert Bitcoin back to local currency via underground channels.

This layering approach leveraged the pseudonymous nature of crypto assets. Although China banned crypto trading in 2017 and outlawed all digital asset transactions in 2021, underground channels and offshore platforms remain active.

Tracing Funds Across Offshore Exchanges and Mixers

Blockchain forensics teams from China’s public security bureau and specialised financial investigators collaborated to trace the stolen assets. Despite sophisticated mixing services and tumblers, they managed to:

Identify on-chain clusters linked to the laundering ring.
Track transactional patterns across multiple wallets.
Match seed addresses to shell companies and personal accounts.

Ultimately, more than 90 BTC—worth several million yuan at today’s prices—were seized. This successful operation highlights the evolving techniques used in cryptocurrency fraud and the critical need for skilled compliance teams.

The Aftermath: Seizure, Prosecution and Sentencing

Following the asset seizure, Chinese authorities arrested key participants and brought charges for financial misconduct, embezzlement and money laundering. Sentences ranged from six months to 14 years behind bars.

The case underlines China’s zero-tolerance stance on illicit crypto activities. Although mainland exchanges have largely disappeared, regulators continue to pursue cross-border crimes and collaborate with international partners.

Implications for Crypto Recruitment and Compliance

For organisations operating in web3, this scandal underscores the urgency of robust compliance roles and specialised talent acquisition:

Dedicated crypto compliance officers to monitor transactional flows.
Blockchain auditors to review smart-contract integrity and subsidy programmes.
Cybersecurity experts adept at identifying phishing, mixing and layering techniques.
Legal advisors well versed in cross-border cryptocurrency regulations.

Spectrum Search, a leading blockchain recruitment agency in the UK, advises businesses to invest in end-to-end risk management and partner with experienced web3 recruiters to source the right blockchain talent.

Rising Demand for Web3 Security and Talent Acquisition

As crypto crime grows in complexity, recruitment trends are shifting:

Organisations seek crypto headhunters to locate senior compliance professionals.
Defi recruiters are in high demand to evaluate protocol security and audit skills.
Web3 talent acquisition teams require deep networks in both traditional finance and decentralised projects.
Soft skills such as cross-cultural communication and regulatory navigation are now critical.

Companies that fail to prioritise diligent crypto recruitment strategies risk costly oversights and reputational damage, as seen in other high-profile incidents like the record-breaking crypto heists of 2024.

Building Resilience with Targeted Hiring

To prevent internal collusion and strengthen controls, consider:

Segregation of duties – no single employee should approve and execute high-value transfers.
Regular rotation of compliance and finance roles.
Automated on-chain monitoring tools integrated into the financial workflow.
Continuous training in emerging threats, from mixer services to advanced money-laundering methods.

Spectrum Search’s web3 recruiters work closely with clients to define rigorous hiring criteria and deliver top talent with proven track records in blockchain security.

China’s Evolving Crypto Stance and Global Impact

Despite outright bans, China still retains over 190,000 BTC seized in past crackdowns. This reservoir of assets fuels ongoing investigations and trials, while serving as a warning to would-be offenders.

Globally, financial centres are watching Beijing’s enforcement playbook. Many jurisdictions ramp up anti-money laundering (AML) regulations and refine licensing processes for digital asset service providers.

For UK firms and international enterprises, staying ahead means:

Partnering with specialist crypto recruitment agencies to secure legal, compliance and tech talent.
Engaging expert blockchain headhunters for leadership roles in security and risk management.
Investing in forensic analytics platforms that spotlight suspicious patterns.

Emerging Roles in the Battle Against Crypto Crime

As the threat landscape evolves, new roles become indispensable:

On-chain intelligence analysts – mapping wallet clusters and threat actors.
AML/KYC specialists – ensuring end-user onboarding meets global standards.
Smart-contract security auditors – pre-empting protocol exploits.
Regulatory liaisons – bridging crypto projects with financial authorities.

These positions demand a blend of cryptographic know-how, legal literacy and investigative instinct.

Thriving in a High-Risk Environment

Web3 and DeFi sectors continue to expand, but with growth comes scrutiny. Companies must:

Adopt zero-trust principles in treasury management.
Conduct periodic red-team exercises for simulated attack scenarios.
Implement clear whistleblowing channels to detect internal collusion.
Ensure ongoing professional development through targeted workshops and certifications.

Forward-thinking organisations leverage blockchain recruitment specialists to assemble multidisciplinary teams that can outpace agile threat actors.

Cultivating a Culture of Integrity

Beyond technical controls, culture is a powerful deterrent:

Transparent incentive policies that minimise discretionary approvals.
Ethics training emphasising fiduciary responsibility in a decentralised world.
Leadership commitment to accountability at all levels.

By embedding compliance into day-to-day processes, businesses not only safeguard assets but also strengthen employer branding—crucial for attracting elite crypto talent.

Connecting with Spectrum Search

At Spectrum Search, we specialise in matching organisations with high-calibre professionals across finance, security and technology. Whether you need a seasoned crypto recruiter, an expert blockchain recruiter or a seasoned web3 headhunter, our network spans the globe.

Discover how our tailored web3 recruitment agency services can fortify your defences and drive sustainable growth. Learn more about the importance of expert crypto compliance recruitment and stay ahead of evolving threats.