Our Man in Shanghai: Scandal as $45M of stolen government funds lost using 100X leverage

Our Man in Shanghai: Scandal as $45M of stolen government funds lost using 100X leverage

The Chief Marketing Officer a blockchain security company has been charged with embezzlement; Peter Thiel calls Bitcoin a ‚weapon‘ of China (but no one cares), and CZ’s net worth rises to $1.9 billion.

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Blockchain security company Beosin has been the focus of a major scandal after its Chief Marketing Officer Gao Ziyang was taken into custody and charged with embezzlement of state-owned assets. He is alleged to have been using government funds to unsuccessfully short BTC, resulting in a massive liquidation of over 300 million renminbi, or $45 million dollars.

Beosin, also known as Lianan Tech, had a working relationship with Chinese authorities and was helping them investigate fraudulent fundraising schemes. After the seizure of funds back in 2020, Beosin was tasked with storing and selling the assets, to be later returned to the state treasury. Instead of selling the assets, CMO Gao Ziyang allegedly opened a short position in late August, hoping to increase the size of the positions for personal gain. At the time, BTC was trading around $12,000.

Authorities say that records obtained from OKEx show the position began using 10x leverage, before increasing to 100x, and eventually ended up in liquidation. They began to ask about the whereabouts of the funds, before finally realizing that the assets were no longer in the wallet. Online, people have marveled at the age of Gao Ziyang, who was described as in his twenties. The future of Beosin, which was once regarded as a credible blockchain security company in China, is now in serious doubt.

Peter Thiel’s Bitcoin claims ignored

On Wednesday, PayPal co-founder and venture capitalist, Peter Thiel warned that the Chinese government may be using Bitcoin as a “financial weapon” to undermine the stability of the U.S. Dollar. The reaction was quite muted, as only 30 comments responded to the story on Sina Finance, a social media account with over 23 million followers. One of the top comments simply pointed out that “Bitcoin wasn’t invented by China” while another comment simply stated “Impossible”.

Binance billionaire

On Thursday, Binance founder Zhao Changpeng, better known as CZ, appeared as #1664 on Forbes’s annual billionaire list. His net worth is now listed at $1.9 billion, an increase of $700 million from the last list in 2020.

Nanjing Ribensi bought by US company

US Company Future FinTech announced earlier this week that they had agreed to a deal to acquire China-based mining company Nanjing Ribensi Electronic Technology Co. Nanjing Ribensi operates a mining farm that can handle up to 30,000 Bitcoin mining machines. The deal was worth approximately $9.1 million dollars and stipulates that the mining company must generate no less than approximately $2.3 million dollars in 2021.

Blockchain standards accelerated

China’s National Development and Reform Commission called for the accelerated implementation of blockchain standards in a new plan released on April 1. The plan was jointly issued by 28 government departments and also included technologies such as cloud computing, IoT, and big data.

This weekly roundup of news from Mainland China, Taiwan, and Hong Kong attempts to curate the industry’s most important news, including influential projects, changes in the regulatory landscape, and enterprise blockchain integrations.


Zur Quelle
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The Chief Marketing Officer a blockchain security company has been charged with embezzlement; Peter Thiel calls Bitcoin a ‚weapon‘ of China (but no one cares), and CZ’s net worth rises to $1.9 billion.

OKEx Skips Warren Buffett Lunch, Donates $4.5M to Insurance Fund

OKEx Skips Warren Buffett Lunch, Donates $4.5M to Insurance Fund

OKEx has revealed its contribution to the perpetual swap market insurance, whose amount is equivalent to the cost of the lunch with Warren Buffett

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Cryptocurrency exchange OKEx has donated $4.5 million in Bitcoin (BTC) to its perpetual swap market insurance fund as a show of support for the Warren Buffett Power Lunch.

More protection for traders

In a press release shared with Cointelegraph on July 23, the Malta-based crypto exchange revealed its contribution to the perpetual swap market insurance, whose amount is equivalent to what Tron’s Justin Sun paid to have lunch with Warren Buffett. 

Andy Cheung, head of operations of OKEx, commented on the contribution saying that “the Power Lunch is a significant initiative to advocate the value of Bitcoin, blockchain, and digital assets to traditional finance leaders on Wall Street.” Cheung added:

“We wanted to support blockchain development in our own way and, more importantly, put our customers first. That’s why we decided to place our resources where our customers can directly benefit.”

The insurance fund is used to pay the amount of default value on a margin call before the clawback event is triggered. So the bigger the insurance fund, the less likely the clawback would be occur. The clawback mechanism would, therefore, act as the last line of defense if a large-scale systematic event occurs. Insurance serves as a cushion to protect trader’s profit from reaching the last defended line.  

“The insurance fund minimizes the uncertainty and trading risk of which traders’ expected profit would be taken out, aka clawback risk,” OKEx explains. 

The donation is expected to go through on 24 July, which will roughly double the amount of the perpetual swap market insurance fund.

However, as Cointelegraph reported earlier, the Tron Foundation is postponing the Warren Buffett lunch to an unspecified date due to founder Justin Sun falling ill with kidney stones. Nevertheless, the given donation plan will not be affected, according to OKEx.

Cryptocurrency donations taking off

The charity sector has been increasingly adopting digital currencies, with leading industry players having donated in a number of projects worldwide. This month, decentralized insurtech firm Etherisc launched a blockchain-based insurance platform for farmers in Sri Lanka through a partnership with the insurance company Aon and the charity Oxfam.

The Binance Charity Foundation announced an alliance of 47 organizations to make a token geared towards women’s health. Binance claims that a blockchain-based means of distributing charity will address inefficiencies and transparency issues that are purportedly present in traditional means of charitable giving.


Zur Quelle
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OKEx has revealed its contribution to the perpetual swap market insurance, whose amount is equivalent to the cost of the lunch with Warren Buffett