Bitcoin Backfire: How A $20-M Employee Heist Crashed Into Prison Time

In Beijing, prosecutors have jailed eight people for running a year‑long Bitcoin scam that drained over 140 million yuan—around $20 million—from a short‐video platform and then funneled the cash into crypto. According to a White Paper released by the People’s Procuratorate of Haidian District, the case ranks among the most complex anti‑corruption cases handled between 2020 and 2024. What began as simple bonus approvals inside the company turned into a year‑long scheme that hid stolen funds behind shell firms and digital currencies. Insider Power Opened Loopholes Based on reports , an employee named Feng held sole control over service‑provider onboarding, bonus qualifications and payout approvals. He quietly tweaked bonus policies to create gaps that only he and two outside helpers, Tang and Yang, could exploit. Fake documents flowed in with private data that Feng leaked. Then the trio rerouted bonus payments into made‑up accounts, instead of rewarding real work. By the time auditors spotted the missing cash, nearly 140 million yuan had already vanished. Fake Firms And Laundering Chain The gang used shell companies with no real operations. Yang directed associate Wang and others to set up around 10 of these paper businesses. All they did was collect the bogus bonus payouts. From there, funds jumped across multiple bank accounts until they landed in Yang’s hands. Feng then ordered the next step: converting it into Bitcoin . They split the loot on eight different international platforms and mixed the coins, scrambling the transaction trail to hide the money’s origin. Authorities Trace Bitcoin Flow Prosecutor Li Tao, of Haidian’s Science and Technology Crime division, built a detailed map of the scam. By comparing company data logs, bank records and blockchain transfers, his team peeled back each layer of concealment. They even recovered over 90 Bitcoin during the investigation—enough to prove exactly how the “closed‑loop” laundering chain worked. Each recovered coin tied back to the stolen rewards, confirming every twist of the money’s path. Sentencing took into account each person’s role. Feng received the longest term—14 years and six months behind bars—while the other seven were handed prison sentences ranging from three to 14 years, plus hefty fines. All were found guilty of occupational embezzlement. This case serves as a warning: when one person holds too much power, even routine bonus systems can become vehicles for big fraud—and modern crypto tools can’t guarantee anonymity forever. Featured image from Unsplash, chart from TradingView