A Chinese court has ruled that futures trading on cryptocurrency exchanges constitutes gambling, leading to convictions for several individuals linked to the BKEX platform.
While some were found guilty of facilitating illegal activities, most received suspended sentences.
The case revolves around BKEX, a crypto exchange founded in 2018 by Ji Jiaming, who remains a fugitive. Initially offering spot trading, the platform later introduced leveraged futures contracts, which authorities deemed akin to gambling. Between 2019 and 2022, BKEX operated under various names before dissolving, but by 2021, it had enabled perpetual contracts allowing users to speculate on Bitcoin and Ethereum prices with leverage as high as 1,000x.
Court documents revealed that BKEX attracted over 270,000 participants to its contract trading feature, generating nearly $55 million in profits. With its founder absent, the trial focused on employees and promoters.
Among those convicted was Zheng Lei, a key figure in the exchange’s wallet management, who received a 25-month suspended sentence and a fine of approximately $30,000. Another employee, Wang, responsible for KYC compliance, was given a 23-month suspended sentence with a $10,000 fine. Promoters like Dong, who built a network of thousands of sub-agents, were also penalized.
The verdict aligns with China’s broader crackdown on speculative cryptocurrency activities. Authorities have recently introduced stricter banking measures to prevent illicit digital asset transactions. However, China’s stance on crypto remains inconsistent—while courts have cracked down on exchanges, previous rulings have recognized cryptocurrencies as legal property.
Despite regulatory pressure, China remains a key player in the global crypto space, with a significant number of investors trading through decentralized platforms and offshore exchanges. This ruling, however, could drive more crypto businesses underground or push them to relocate, further complicating the country’s already complex approach to digital assets.
