A prosecutor in Beijing has reportedly approved the arrest of a director of a Shanghai-listed Chinese big data company on suspicion of misappropriating the firm’s funds to mine Bitcoin, exchange filings showed.
See related article: Beijing banned crypto mining, so China miners went underground
Fast facts
- Li Qunnan, a director of the board of Zhongchang Big Data, was accused of embezzling 53.55 million yuan (US$8 million) in company’s funds to buy Bitcoin mining rigs and pay for hosting services in 2021, the company said in multiple filings to the Shanghai Stock Exchange.
- Li, however, is not in China at the moment, according to local media reports.
- Zhongchang Big Data booked a net loss of 472.1 million yuan (US$71 million) in 2021, down from a net profit of 9.5 million yuan in 2020 (US$1.4 million), according to its 2021 annual report.
- “We can’t obtain sufficient, adequate audit evidence to base our audit on,” the firm’s auditor said in comments translated from Mandarin Chinese on Zhongchang’s 2021 report.
- In May, the exchange slapped the firm with a delisting risk warning, requiring it to place a “*ST” tag on its stock code to warn investors of its financial distress and legal trouble.
- China started a series of intensive crackdowns on crypto mining in May 2021 and introduced a blanket ban in September.
- However, underground mining operations persist, with companies finding means to stay off the government’s radar.
See related article: Hydropower plant in China’s Hubei province fined for powering crypto mining