(Asian Tech Press) Gao Ziyang, a 27-year-old executive of a Chinese blockchain security company, allegedly misappropriated $46 million of state-owned digital currencies to short bitcoin.
Beosin, also known as Chengdu LianAn Technology Co., Ltd., is one of the top four blockchain security companies in China, founded by a professor of the University of Electronic Science and Technology of China.
The company has been doing business in blockchain security since 2018, cooperating with the Ministry of Industry and Information Technology (MIIT), the State Internet Information Office, and the Minister of Public Security, and other government units, to assist the police in fighting crime in the blockchain industry.
Gao Ziyang, Beosin’s chief marketing officer (CMO), has been in contact with blockchain technology since 2012, participated in the investment incubation management of several projects, and is a member of the United Labs, a blockchain investment alliance.
According to informed sources, Gao has been shorting bitcoin since August 2020, when it just surpassed $12,000. Sichuan police retrieved Gao’s billing records and found that he was shorting Bitcoin with 10 times leverage at the beginning, then the leverage multiplier was gradually adjusted upwards to excessively 100 times at a later stage.
Gao joined Beosin as CMO in August 2019 and has been responsible for cooperation in most of the cases with the police. After the police solved the cases, the stolen money and confiscated funds were to be handed over to the state treasury. But many of them were digital currencies, the police entrusted to Beosin for liquidation. Gao took advantage of his official authorities to misappropriate the police’s digital currencies, intending to profit from shorting bitcoin.
However, the price of bitcoin went all the way up, and Gao suffered a serious loss. Gao misappropriated almost 300 million yuan (about $46 million), which were from the police in Bazhong, Meishan, and Hegang.
In order to delay the time to pay the state treasury, Gao used various ways to cope with the police, telling the police that the wallet was stolen and the coins inside were transferred away. The police targeted Gao as a suspect through detailed investigation and also through on-chain transaction inquiries.
Gao is currently under approved arrest for alleged illegal embezzlement of state assets and is being held in Bazhong, Sichuan. And Heilongjang police are now also squatting in Sichuan, collecting evidence of Gao’s suspected fraud.
And Beosin said it is fake news, malicious speculation, please the public not to believe the rumors.
The people involved believe that there is a major mistake in Beosin’s internal management, which provided an opportunity for Gao to commit the criminal act of misappropriating state-owned assets.
