China Throws the Book at BKEX Staff Over Illegal Crypto Gambling

As the U.S. gives crypto derivatives firms some wiggle room, China is opting for an iron fist against platforms like BKEX for illegal gambling.

While Polymarket and Kalshi breathe easier stateside, a court in China’s Hunan Province just levied stiff sentences against agents and employees of the BKEX crypto contracts trading platform. Enabling punters to bet on crypto price moves, judged as unlawful gambling.

Launched in 2018 and shuttered in 2021, BKEX let users wager bitcoin, ether and other cryptos in USDT on its contracts trading system. The platform reportedly pulled in $54.7 million before authorities caught up, all while re-registering repeatedly to avoid detection. Not clever enough it seems.

Among those sentenced was Zheng Lei, who earned a tidy $186,600 as BKEX’s wallet engineer and department head. He’ll now serve over two years behind bars and cough up a $20,900 fine.

Wang, who handled KYC checks, also got 11 months and must pay $7,250. Meanwhile Dong, who promoted BKEX, got one and a half years, forfeited his $31,000 earnings and has to pay nearly $5,000 for his role in the mess.

The case underscores China’s dim view of crypto derivatives despite momentum in the U.S. Earlier mining and trading bans signaled limited sympathy in Chinese courts. But the BKEX convictions turn the screw further for gambling-style platforms.