BKEX Busted for High-Stakes Gambling Scheme

Crypto News Regulation

Crypto Exchange BKEX Busted for High-Stakes Gambling Scheme

Written by Aaron S.,

Editor-In-Chief

Last Updated: January 30, 2025

Key Takeaways

BKEX’s contract trading was ruled illegal gambling, leading to prison sentences for its staff;
Users bet on crypto prices with high leverage, which violates Chinese gambling laws;
Authorities seized funds and fined several BKEX employees for their roles in the scheme.

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Crypto Exchange BKEX Busted for High-Stakes Gambling Scheme

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A court in Pingjiang County, Hunan Province, has ruled that BKEX, a cryptocurrency exchange, operated an illegal gambling platform through its contract trading feature.

The ruling stated that BKEX allowed users to place bets using the stablecoin USDT USDT $0.9988 and use leverage—sometimes as high as 1,000 times—to predict price changes in Bitcoin BTC $92,074.69 , Ethereum ETH $3,132.33 , and other digital currencies.

On January 29, the court determined that these transactions qualified as gambling under Chinese law, involving people placing wagers on financial outcomes.

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Before authorities intervened, BKEX had attracted more than 270,000 users, including 60,000 active traders, and generated profits of over 54.7 million USDT. As a result of the investigation, eight individuals were charged with criminal offenses.

One of them, Zheng Lei, a former wallet engineer and department head, was found guilty of providing technical support for the operation. He received a prison sentence of two years and one month, along with a fine of 150,000 yuan (about $20,900). Authorities also confiscated his earnings of 1.34 million yuan (around $186,600).

Another individual, Wang, who managed BKEX’s audit department and oversaw transaction processing, was sentenced to one year and 11 months in prison and fined 52,000 yuan (about $7,250).

Meanwhile, Polymarket, a cryptocurrency-based prediction market, was recently restricted in Singapore. What happened? Read the full story.