Yishidun's major futures manipulation case: Making a profit of 2 billion and considering using Bitcoin to launder money

     With an initial capital of less than 7 million yuan, Yishidun eventually made an illegal profit of more than 2 billion yuan, making Yishidun, a little-known trading company, instantly the focus of China's capital market. After making more than 2 billion yuan, Yishidun considered using Bitcoin to transfer the illegal income overseas. But in the end, due to the vigilance of the Bitcoin platform, Yishidun gave up this plan and turned to traditional underground banks. Before the case was discovered, it had only transferred one-tenth of the 2 billion yuan investment income.

     According to Xinhua News Agency, Yishidun Company concealed the number of futures accounts it actually controlled under the name of a trading company, used its registered capital of US$ 700,000 and RMB 3.6 million loaned by others as initial funds, totaling approximately RMB 7 million, to participate in stock index futures trading in China , earning illegal profits of more than RMB 2 billion.

After making a profit of 2 billion yuan, China's foreign exchange control became a barrier that Yishidun could not avoid. According to the current regulations on foreign exchange inflows and outflows, foreign-owned enterprises' foreign exchange inflows and outflows must have a legal trade contract or approval from the State Administration of Foreign Exchange for capital inflows and outflows.

     According to Caixin.com , the Yishidun team considered using Bitcoin to transfer funds and began contacting China's Bitcoin trading platform, BTC China, in May this year.

     According to a person close to Bitcoin China, in May 2015, two executives of Yishidun, Anton Murashov and Liang Zezhong, met with people related to Bitcoin China, hoping to buy 10,000 bitcoins per month, but did not disclose the total amount. At that time, the price of one bitcoin was less than 2,000 yuan.

     BTCChina proposed that the requirements for buying Bitcoin as a company are stricter than those for buying as an individual. BTCChina hoped that Yishidun would provide proof of identity and funds, including business license, legal person passport, bank transfer legal person certificate, address, source of funds and other documents. However, in the end, the cooperation between the two parties fell through because the information submitted by Yishidun was incomplete and did not meet the real-name authentication requirements. On November 3, BTCChina explained the situation to the relevant departments.

     An insider told Caixin: “I don’t think they are optimistic about Bitcoin. The suspicion of money laundering is a bit obvious, so we are very cautious. First, they repeatedly emphasized that they require the purchase of new Bitcoins because old Bitcoins still have transaction information and are easier to track. Second, they spent more than a month discussing many details, such as whether miners can directly transfer the coins they have mined to their accounts without going through the platform.”

     Li Qiyuan, CEO of Bitcoin China, told Caixin reporters that if Bitcoin China had not fulfilled its anti-money laundering obligations as required by the central bank and conducted strict real-name authentication reviews on Easton, their 2 billion yuan in illegal proceeds would have most likely flowed overseas.

     The Wall Street Journal website previously mentioned that JPMorgan Chase CEO Jamie Dimon said: "No government will tolerate Bitcoin for a long time. Now that Bitcoin is still small, many senators and congressmen will express support for Silicon Valley innovation. But in fact, no currency can avoid government regulation."

     After causing a sensation in 2013, the virtual currency Bitcoin has been hit by negative news in 2014, and the bankruptcy filing of Bitcoin exchange Mt. Gox has made the blow to Bitcoin reach its peak. Since then, the trading price of Bitcoin has been hovering between $200 and $300. Now, Bitcoin seems to be making a comeback.

     Bitcoin prices have risen for seven consecutive weeks, the longest consecutive rise since November 2013. The current price has risen 123% from the low point in January this year and 50% from the low point in September. This has put Bitcoin back in the spotlight.