Chinese state media disclosed this week that Yao Qian, the former architect of China's digital yuan, accepted cryptocurrency bribes exceeding $8 million while serving in senior regulatory positions.
The case shows how corrupt officials utilized the same blockchain technology Yao helped develop to hide illegal transactions through hardware wallets and anonymous transfers.
State broadcaster CCTV presented details of Yao's corruption scheme on January 14 in a documentary called "Technology Empowering Anti-Corruption." The program demonstrated how investigators followed 2,000 Ethereum from a businessman to Yao's personal wallet in 2018, with the cryptocurrency valued at 60 million yuan at peak prices.
Yao, who previously directed the Digital Currency Research Institute at the People's Bank of China, employed multiple shell accounts and blockchain addresses to conceal bribes totaling at least 22 million yuan in traditional currency along with significant cryptocurrency holdings.
Investigators found three hardware wallets in Yao's office drawer. Each device looked like ordinary USB drives but contained millions of yuan in cryptocurrency.
"These three seemingly insignificant little wallets stored tens of millions of yuan," stated Zou Rong, a staff member with the Central Commission for Discipline Inspection stationed at the China Securities Regulatory Commission.
While Yao believed virtual currencies provided anonymity, blockchain's transparency allowed investigators to rebuild complete transaction histories, connecting bribes directly to his wallets.
The investigation uncovered that Yao bought a Beijing villa worth more than 20 million yuan using funds tracked to cryptocurrency exchanges, including a single 10 million yuan payment converted from digital assets.
Authorities broke through layers of shell accounts controlled by relatives and intermediaries, obtaining clear evidence that businessman Wang transferred 12 million yuan through an information services company in exchange for regulatory favors.
"He believed that after setting up multiple layers, the system would be more isolated," said Shi Changping of Shanwei City's Discipline Inspection Commission, noting that multiple parties actually strengthened the evidence chain.
Yao's legal bank accounts displayed no obvious irregularities, but cross-checking with government databases revealed accounts opened under other identities that he secretly controlled.
These shell accounts received large transfers that investigators traced back through four layers to cryptocurrency exchange fund accounts, eventually linking to his property purchases and corrupt dealings with technology service providers.
Jiang Guoqing, Yao's longtime subordinate who moved with him from the People's Bank to the securities regulator, acted as the main intermediary for cryptocurrency bribes.
"I set up a transfer address where people would send coins, then transfer them to Yao Qian's personal wallet," Jiang confessed, admitting he profited from facilitating power-for-money transactions.
In 2018, Jiang connected businessman Zhang to Yao, who used his industry influence to assist Zhang's company in issuing tokens and raising 20,000 Ethereum through a cryptocurrency exchange, receiving 2,000 Ethereum in return.
"Yao Qian has great influence in the industry because of his position," Jiang told investigators, describing how regulatory authority converted into cryptocurrency market access.
Beyond digital bribes, prosecutors recorded that Yao accepted expensive gifts, organized luxurious banquets, manipulated employee recruitment, and facilitated software procurement deals with technology providers during his tenure at the China Securities Regulatory Commission.
The investigation also showed that Yao participated in superstitious practices and established connections with individuals described as "key training targets" for illicit activities.
Yao was expelled from the Communist Party in November 2024 and transferred for criminal prosecution after investigators achieved "mutual corroboration and a closed loop of evidence" by combining blockchain transaction records with traditional financial forensics.
His case provided valuable experience for Chinese authorities investigating virtual currency corruption. Investigators stressed that "cryptocurrency is useless if it can't be cashed out—when virtual assets eventually become real assets, their true nature is easily exposed."
The villa Yao purchased with converted cryptocurrency remained unfinished when authorities detained him, serving as physical evidence that revealed his elaborate digital deception scheme spanning years of regulatory service.
Yao's downfall has not halted China's central bank digital currency ambitions. The People's Bank of China reportedly launched a new framework on January 1 that permits commercial banks to pay interest on digital yuan wallet balances.
This move addresses long-standing adoption challenges. The e-CNY has processed 3.48 billion transactions worth 16.7 trillion yuan through November 2025, but still lags far behind Alipay and WeChat Pay, which control over 90% of China's mobile payments market.