Chinese Prosecutors Seize Millions in Bitcoin in Case Linked to Online Betting Platform

Chinese prosecutors have seized close to $17 million in Bitcoin from a man accused of stealing funds from an overseas online sports betting platform, in a case that has drawn attention to the legal treatment of cryptocurrency and data-related crimes in China.

According to Chinese media outlet The Paper, the suspect is a Shenzhen-based IT network security engineer. For legal reasons, media reports have identified him under the alias Li Dong. Li was first detained in 2024 by police in Hunan Province on suspicion of theft and the unlawful acquisition of citizens’ personal information.

During that investigation, authorities confiscated 103 BTC, which is currently valued at more than $9 million. However, only days after Li was released on bail, he was taken into custody again, this time by police in Changge, Henan Province. Following a separate investigation, officers in Henan seized an additional 80 BTC, worth approximately $7.2 million.

Law enforcement agencies in Hunan and Henan have stated that the cases are not directly related and that Li has been charged with different offenses in each jurisdiction. Officials in Changge initially alleged that Li was involved in the “theft of citizens’ personal information.”

Prosecutors in Changge further claim that in 2020 Li took advantage of a security flaw in an overseas gambling platform that was widely used by Chinese players, allowing him “to obtain the personal data of 1.84 million Chinese citizens.” According to the prosecution, Li then used this information to siphon off more than $5 million in commission fees, transferring the funds into accounts under his control.

Authorities allege that Li subsequently converted a large portion of the money into Bitcoin. Police have stated that Li confessed to the offenses and admitted his guilt. However, his defense team disputes these claims, arguing that there is insufficient evidence tying him to the alleged theft.

Li’s lawyers have also asserted that the seized data has been compromised and have alleged that his confession was “coerced” by law enforcement. They claim that police threatened to prosecute Li’s pregnant wife if he refused to confess. Members of Li’s family have additionally questioned whether the confiscation of Bitcoin is lawful under Chinese legislation, suggesting the prosecutions may be driven by financial motives.

Li’s trial opened on January 7 at the Changge City Court. During the proceedings, prosecutors told the court that they possessed extensive “electronic” evidence demonstrating Li’s “multiple” criminal acts, including theft and the misuse of private data. The defense challenged the prosecution to produce this evidence in court. The judge subsequently adjourned the hearing and has not yet announced a new trial date.

While the buying and selling of Bitcoin is illegal in China, the authorities have never formally banned the ownership of cryptocurrency. Gambling, by contrast, is prohibited in almost all forms nationwide. Despite strict bans, betting remains widespread, with illegal gambling venues emerging in remote regions. In response, Chinese police have deployed drone technology to “patrol” rural areas in an effort to locate underground casinos and betting operations.

In September last year, authorities charged two individuals with running an angling pond that offered cash prizes to participants who caught “lucky” black carp. At the same time, public debate has intensified over the growth of “gambling-like” lucky boxes, also known as blind boxes, sold on Chinese e-commerce platforms.

On January 23, Tu Longke, deputy director and researcher at the Institute of Law at the Shanghai Academy of Social Sciences, urged judicial authorities to regulate blind box sales while intensifying efforts to combat gambling-related crimes. Such measures, Tu said, would help to avoid and prevent the risks associated with gambling addiction.

By fLEXI tEAM