Wen Jian, 42, was found guilty of laundering significant amounts of Bitcoin linked to an alleged multi-billion-dollar investment fraud in China.
A woman accused of converting bitcoin into cash and property to help hide the proceeds of a $6.4 billion fraud was sentenced to nearly seven years on May 24 for money laundering after a trial in a London court.
Wen Jian, 42, was found guilty of laundering significant amounts of Bitcoin linked to an alleged multi-billion-dollar investment fraud in China.
Prosecutors said Ms. Wen helped hide the source of money allegedly stolen from nearly 130,000 Chinese investors in fraudulent wealth schemes between 2014 and 2017.
She was not alleged to have been involved in the underlying fraud, which prosecutors said was masterminded by another woman known to Ms. Wen as Zhang Yadi. Ms. Wen believed Ms. Zhang was independently wealthy.
Ms. Zhang fled Britain in 2020, and her whereabouts are unknown.
Judge Sally-Ann Hales described Wen’s offense as “sophisticated and involved significant planning,” noting that Ms. Wen knew she was dealing with criminal property.
During the trial at Southwark Crown Court in March, Ms. Wen denied three counts of money laundering, saying she was unaware of the criminal origins linked to bitcoin. However, the jury found her guilty on one count, leading to her sentence of six years and eight months in prison.
As part of the investigation, British police seized wallets holding over 61,000 bitcoins, marking one of the largest cryptocurrency seizures by law enforcement worldwide. When police gained access in 2021, the 61,000 bitcoins were valued at around $2 billion at the time. Today, the value has surged to over $4 billion, underscoring the scale and significance of the assets involved.
Notable Cases of Cryptocurrency Fraud
Ms. Wen’s case is one of several high-profile incidents involving massive amounts of illicit cryptocurrency transactions.A prominent case is that of Sam Bankman-Fried, founder and CEO of the cryptocurrency exchange FTX. In March 2024, a federal judge
sentenced Mr. Bankman-Fried to 25 years in prison for defrauding investors of $8 billion via the collapsed cryptocurrency exchange. His case highlighted the risks and vulnerabilities in the cryptocurrency market, sparking significant debate about regulation and oversight.
Last year, Zhao Changpeng, the founder and former CEO of the world’s biggest cryptocurrency exchange, Binance,
pleaded guilty to money laundering charges and agreed to step down and pay a $150 million fine. Binance itself faces $4.3 billion in fines to settle criminal charges and must make a “complete exit” from the United States.
In 2022, the Department of Justice said it
seized over $3 billion worth of stolen bitcoins. Prosecutors said James Zhong pleaded guilty to committing wire fraud in September 2012 when he allegedly stole over 50,000 bitcoins from the now-defunct Silk Road marketplace. Mr. Zhong was accused of transferring the stolen cryptocurrency into his private accounts, amassing over $3.36 billion at the time. He faced a maximum sentence of 20 years in prison after pleading guilty to wire fraud.
Industry Concerns
The use of cryptocurrencies in illicit activities has drawn scrutiny from regulators and industry leaders. A January
report by blockchain analysis firm Chainalysis revealed that $24.2 billion worth of crypto transactions in 2023 were conducted via illicit addresses. Bitcoin accounted for nearly a quarter of this volume, remaining the largest cryptocurrency used for illicit purposes.
“Some forms of illicit cryptocurrency activity, such as darknet market sales and ransomware extortion, still take place predominantly in Bitcoin,” the report stated.
JPMorgan Chase CEO Jamie Dimon has repeatedly
criticized cryptocurrencies, calling them risky and prone to misuse for illegal activities. Similarly, the late Charlie Munger, vice chairman of Berkshire Hathaway,
called cryptocurrencies “partly fraud and partly delusion.”
Cryptocurrencies have also been exploited by America’s adversaries. A May 2023
report from Elliptic found that Chinese businesses involved in trafficking fentanyl into the United States were using cryptocurrencies to facilitate their operations, highlighting the national security implications of unregulated digital currencies.
“Elliptic researchers received offers from more than 90 China-based companies to supply fentanyl precursors, 90 percent of which accepted cryptocurrency payments,” the report said.
Reuters and Naveen Athrappully contributed to this report.
