Chinese Citizen Sentenced to 13 Years in Prison in Bitcoin (BTC) Extortion Case

  • A Chinese man had extorted over 2,000 bitcoins from a company in 2015.
  • The man has now been sentenced to 13 years in prison and ordered to pay a $7,200 fine.

A Chinese citizen who reportedly obtained 2,099 bitcoins (BTC) in 2015 (currently valued at $13.5 million) by blackmailing a company had sold them for only about $300,000.

The man had “cleverly” blackmailed a company and managed to extort a large amount of the pseudonymous cryptocurrency. After trading the bitcoins for cash, the Chinese citizen reportedly used the funds to make a down payment on an apartment, buy a brand new BMW, and deposited some of the money in his bank account.

Threatening To Expose Company's Illegal Business

According to court documents released on November 6th, the bitcoin extortion case involves the man blackmailing a company after he came across some evidence - which showed that the firm had conducted several illegal transactions.

The court papers have identified the accused as Du Bing, and prosecutors have said that Bing threatened Zheng (the company’s board secretary) by telling him that he would expose the firm’s illicit business activities.

Bing also managed to force the company to pay him 3 million Chinese yuan (appr. $432,000) in bitcoin. At the time, Zheng was able to purchase 2,101.209 bitcoins as the cryptocurrency was trading for only about $200 (in 2015).

After Bing received the bitcoins from Zheng, he immediately converted them to cash in order to buy various luxury items. Per court documents, Bing has been sentenced to 13 years in prison as he has been charged for blackmailing and extortion.

The accused has also been ordered to pay a fine of 50,000 CNY (appr. $7,200) and the items he purchased using the funds (obtained from extortion) have been confiscated by authorities.

Court Says Defendant Intentionally Used Bitcoin Due To Its Anonymous Nature

Bing’s attorney had argued that there were currently no (proper) laws in China for bitcoin-related transactions as it was a loosely regulated virtual commodity. There was also no proof that the accused had purchased his car and real estate using bitcoin, according to Bing’s defense lawyer.

However, the court said:

Although it is impossible to [determine] the source of bitcoins in Du’s hardware wallet, which is due to bitcoin’s anonymous nature …[there is sufficient evidence that Bing] chose bitcoin payment to cover up his criminal behavior.

As CryptoGlobe reported in October, a 21-year-old North London resident and computer analyst had hacked 319 million iCloud accounts. The cybercriminal, named Kerem Albayrak, had demanded that Apple Inc pay $150,000 in bitcoin in exchange for him not selling the compromised accounts.

However, Albayrak was tracked down by authorities, and he was charged with one count of blackmail and two counts of “unauthorized acts intending to hinder access to a computer.”

Hamas' Military Wing Asks Supporters for Bitcoin Donations, Again

Francisco Memoria

The Al-Qassam Brigades, the military wing of an organization designated as a terrorist group in Europe and the United States currently in control of the Gaza Strip, Hamas, have recently called on supporters for Bitcoin donations.

According to the Israel National News, the group has asked for cryptocurrency donations through a special page on its website that asked supporters for BTC to “Support the Resistance,” in a campaign that sees it state there’s a duty to “support jihad because Jerusalem is an integral part of the Islamic faith.”

This is notably not the first time the group asks its supporters for donations in the flagship cryptocurrency. Back in January, CryptoGlobe reported that a Hamas spokesperson, Abu Obeida, asked supporters for BTC via Instagram, in a post that read:

The Zionist enemy fights the Palestinian resistance by trying to cut aid to the resistance by all means, but lovers of resistance around the world fight these Zionist attempts and seek all possible means to aid the resistance.

The group has reportedly been looking to raise funds via cryptocurrency as it has faced financial woes in the last few years, as banks throughout the world have been distancing themselves from the organization. Hamas’ representative blamed Israel for its current situation earlier this year.

Hamas Tried To Raise Funds Through Coinbase

As reported, Israel-based blockchain intelligence startup Whitestream tracked down two bitcoin donations the cash-strapped group received after the January plea. Per Whitestream, Hamas’ address showed the group was using Coinbase, and received “two relatively small bitcoin donations” amounting to “only $2,500.”

These are said to have come from a bitcoin trader in Khan Yunes, a small town located in the Gaza Strip. Hamas, at the time, published two bitcoin addresses to receive funds, and the Israeli-based firm believes it had to do so after Coinbase blocked the first one.

Notably, the group’s military wing is asking for donations shortly after a Gaza rocket hit a home in central Israel, according to the BBC.