China’s ‘OTC king’ and Renrenbit founder Zhao Dong is expected to be handed up to three years in prison after reportedly pleading guilty in Hangzhou court early Wednesday.
The People’s Court of West Lake District tried Zhao alongside 11 others linked to a money laundering syndicate.
The crypto exchange and lending platform Zhao founded, RenrenBit, is still in operation. The company told Protos it has a new chief exec and is no longer involved with its embattled former leader.
RenrenBit is one of China’s top over-the-counter (OTC) crypto trading desks, facilitating exchange between local currency and crypto, among other services.
RenrenBit exists in a legal gray area after China’s government effectively outlawed centralized crypto exchanges in 2017.
Police say Zhao earned 70% dividend on laundered cash
These details refute multiple reports last year in which RenrenBit denied Zhao’s arrest.
Recent posts show authorities connected Zhao and another figure named Zhao Peng to a company called Tian Tian — described as a platform for illegally exchanging crypto into fiat currency.
Zhao also ran an app called “Everyday Up,” which police say settled digital cash for a large number of overseas gambling sites. Gambling is illegal in China.
It was through Tian Tian and Everyday Up that Zhao helped wash funds equivalent to 3.1 billion RMB ($480 million) for online casinos.
Zhao reportedly received a 70% dividend on OTC activities related to that money.
RenrenBit founder can appeal, but good luck
It’s worth noting that while China gained a functional judicial system in the reformations of the 1970s, it isn’t renowned for fairness.
Defendants like Zhao can hire attorneys and even defend themselves, but this is almost never successful; a guilty verdict is practically guaranteed once an accusation goes to trial.
As well, defendants have the right to appeal decisions. But this too is frowned upon and individuals are urged to accept outcomes and hope for leniency after sentencing.
In the case of Zhao, police held the RenrenBit founder under arrest without public charges for nearly a year. Authorities recently announced the charges and sentencing is expected within days.
Follow us on Twitter for more informed crypto news.