Chinese court begins trial of prominent crypto OTC trader Zhao Dong

Quick Take

  • A Hangzhou city district court has started the trial of crypto OTC trader Zhao Dong with a charge of “assisting internet crimes”
  • If convicted, Zhao could face a sentence of up to three years in jail, although he has already served nearly a year behind bars
  • Zhao’s case has drawn widespread attention given his status as one of the most prominent figures in the Chinese crypto community since early 2010

The Xihu District Court in the Chinese city of Hangzhou has started the trial of a criminal case against well-known crypto over-the-counter (OTC) trader Zhao Dong and several others.

According to the live stream page of the trial on Wednesday, Zhao was charged with a crime called "assisting internet criminal activities."

Under China's codified laws, the crime is defined as providing someone with information technology, such as internet access, network storage, telecommunication, advertisement promotion and payment settlements, when they know that person is committing an internet-based crime. If convicted, the penalty is up to three years in jail depending on the severity as well as a monetary fine.

The nature of an "assisting internet criminal activities" crime is not the same as "concealing and hiding criminal proceeds." In China, more than 100 people have been convicted for the latter, which involves directly laundering proceeds for criminals using crypto assets. Per China’s codified laws, the conviction of a crime for “concealing and hiding criminal proceeds” could see up to seven years behind bars.

But the case is part of a systematic crackdown by Chinese law enforcement on crimes such as telecommunication fraud, Ponzi schemes and cross-border gambling as well as any entity that may have facilitated the money l