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Thursday, April 22, 2021

Our Man in Shanghai: Scandal has $ 45 million in stolen government funds lost using 100X leverage

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Blockchain security firm Beosin was the subject of a major scandal after its chief marketing officer, Gao Ziyang, was arrested and charged with embezzling state-owned assets. He allegedly used government funds to unsuccessfully sell BTC, resulting in a massive liquidation of over RM300 million, or $ 45 million.

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

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

Peter Thiel’s Bitcoin claims ignored

PayPal co-founder and venture capitalist Peter Thiel on Wednesday warned that the Chinese government could use Bitcoin as a “financial weapon” to undermine the stability of the U.S. dollar. The reaction was pretty muted, as only 30 comments responded to the story on Sina Finance, a social media account with over 23 million subscribers. One of the main comments simply pointed out that “Bitcoin was not invented by China”, while another comment simply said “Impossible”.

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Binance Billionaire

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

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Nanjing Ribensi acquired by an American company

U.S. company Future FinTech announced earlier this week that it has reached a deal to acquire Chinese 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 around $ 9.1 million and stipulates that the mining company is expected to generate no less than around $ 2.3 million in 2021.

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Acceleration of blockchain standards

China’s National Development and Reform Commission called for accelerated implementation of blockchain standards in a new plan released on April 1. The plan was jointly released 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 deal with the most important news in the industry, including influential projects, changes in the regulatory landscape and blockchain integrations from business.

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