Former CSRC Director Yao Qian: Received 2,000 ETH in a single transaction, with a market value exceeding 60 million yuan at one point; four-layer transparency confirmed that virtual currency traders transferred 10 million yuan to his "alias account."

Author: Red Star News

The television documentary “One Step Unstoppable, Half a Step Unyielding,” jointly produced by the Publicity Department of the Central Commission for Discipline Inspection and the China Central Radio and Television Station CCTV, aired its fourth episode “Technology Empowers Anti-Corruption” at 8 PM on January 14 on CCTV’s comprehensive channel. The new media platform of CCTV synchronized its release.

In addition to physical isolation within and outside the country, online and offline physical separation has also become a means for current corrupt elements to conceal their corrupt activities. Gold, cash, and valuables are common carriers of power-money transactions in traditional corruption cases. However, with the advent of the digital age, virtual currencies relying on blockchain technology are continuously developing, and new forms of corruption that must be guarded against have emerged.

These are key evidence items seized in a case involving disciplinary violations by a leading cadre. Some look like mobile phones, some like USB drives, and others like remote controls. In fact, they are different models of hardware wallets used to store and manage virtual currencies. These three seemingly inconspicuous “wallets” contain virtual currencies with an estimated total value equivalent to hundreds of millions of RMB. Those who accepted bribes through this method once harbored a false sense of security, believing they had kept their activities sufficiently hidden.

Yao Qian, former Director of the Technology Supervision Department of the China Securities Regulatory Commission: Honestly, I knew this was a sneaky act. How could I do such a thing? It’s just that I previously thought it would be difficult to find evidence.

Yao Qian, former Director of the Technology Supervision Department of the China Securities Regulatory Commission and former Director of the Information Center, who also served as the Director of the Digital Currency Research Institute of the People’s Bank of China, was placed under investigation in April 2024. The Central Discipline Inspection Commission and the National Supervisory Commission’s disciplinary inspection team stationed at the CSRC, together with the Guangdong Province Shanwei City Supervisory Committee, formed a special task force to handle this case. From the outset, the team conducted in-depth analysis based on Yao Qian’s characteristics.

Zou Rong, staff member of the Discipline Inspection and Supervision Group stationed at the CSRC: Supervision of this person requires creating a profile. He has extensive experience working with digital currencies. Could there also be issues of corruption involving virtual currencies? In the anti-corruption practice of capital markets, new and covert forms of corruption are quite prominent.

As the investigation deepened, the initial predictions of the special team were confirmed. Several large transactions involving Yao Qian were carried out using new and covert corruption methods, including accepting virtual currencies. Virtual currencies on the network are just strings of numbers, separated from the holder’s identity, and completely isolated from banking and payment systems. They can be freely traded on the blockchain, cross-border and unrestricted by geography, with extremely high concealment and significant regulatory difficulty. However, the team was well prepared from the beginning, studying extensive professional knowledge, understanding the operational mechanisms of virtual currencies, and pinpointing key investigative points.

Zou Rong: Holders mainly control virtual currencies on blockchain addresses through private keys. These private keys are long strings of characters, often dozens of characters long, which are not easy to memorize. Usually, hardware wallets are used to store them.

Cai Kunting, staff of the Shanwei City Discipline Inspection and Supervision Commission: During a search, two items must be checked: first, whether there is a hardware wallet; second, whether there are some notes with random mnemonic words. These are crucial during the search.

Indeed, the special team found a hardware wallet in a drawer of Yao Qian’s office. Meanwhile, they strictly followed regulations and laws, utilizing big data and information technology to conduct a comprehensive investigation into Yao Qian’s activities, uncovering relevant traces. From the account information checked legally, Yao Qian’s personal accounts showed no obvious anomalies, but cross-referencing big data revealed several bank accounts opened under other people’s identities, which were actually Yao Qian’s “mule accounts” under his control. Tracing the flow of large sums in and out of these “mule accounts,” one transaction of 10 million RMB was traced back to its source, leading to a major discovery.

Zou Rong: During the preliminary review, we also found that Yao Qian had an abnormal transfer of 10 million RMB. After about four layers of analysis, we confirmed it was from a virtual currency trader’s account.

The investigation found that shortly after the 10 million RMB was transferred into Yao Qian’s “mule account,” it was used to pay part of the purchase price for a villa in Beijing. The villa, valued at over 20 million RMB, was registered under a relative of Yao Qian but was actually owned by him. All the funds for the purchase came from Yao Qian’s “mule account.” Besides this 10 million RMB, two other large deposits totaling 12 million RMB were also used for the house payment. Tracing the source of this 12 million RMB revealed similarly complex origins.

Guangdong Province Shanwei City Discipline Inspection and Supervision Commission staff Shi Changping: He thought that by setting up multiple layers, he could be more isolated. But conversely, it also meant that proving these issues or the existence of evidence would be more numerous and substantial.

The special team penetrated through layers of “deception,” conducting in-depth investigations and evidence collection, pinpointing the source of the 12 million RMB. These funds came from a company controlled by businessman Wang, which provided information services. Further investigation revealed that Yao Qian used his authority to assist this company in providing technological services in the securities and futures industry, forming a complete chain of evidence for this benefit transfer.

Wang also disclosed that a key intermediary involved in this power-money transaction was Jiang Guoqing, a subordinate of Yao Qian, who had a very close relationship with him. The team immediately took measures to detain Jiang Guoqing. Investigations showed that he had participated in nearly every large transaction involving Yao Qian, especially when accepting virtual currency bribes, with Jiang Guoqing involved.

Suspect Jiang Guoqing: Originally, I was supposed to transfer it for him, but then I thought about it and was afraid of causing trouble, so I set up a transfer address. They sent the currency to the transfer address, which then transferred it to Yao Qian’s personal wallet. I knew this was a benefit transfer, and I was afraid. I also knew it was wrong.

Jiang Guoqing followed Yao Qian into the Digital Currency Research Institute of the People’s Bank of China and the CSRC Technology Department. He was both a trusted confidant of Yao Qian and a pawn in his corruption path. Many business owners involved in power-money transactions with Yao Qian were introduced or had their demands conveyed by Jiang Guoqing, who also took a share.

In 2018, a cryptocurrency boss named Zhang requested Jiang Guoqing to help Yao Qian with a token issuance and financing project for his company. Yao Qian agreed to help by contacting a virtual currency exchange, assisting his company in successfully issuing tokens, and raising 20,000 ETH. Later, Zhang presented 2,000 ETH as a thank-you gift, which at its highest valuation exceeded 60 million RMB. Yao Qian’s influence in making this happen was naturally related to his official position.

Jiang Guoqing: Yao Qian’s influence in the industry is very significant because of his position.

To further solidify the evidence chain, the team used blockchain technology to attempt to reconstruct the entire process of Yao Qian accepting virtual currency.

Zou Rong: Virtual currencies are highly concealed, but they are also a double-edged sword. They have two sides because they are also publicly accessible across the entire network. Anyone can check the inflow and outflow records of any blockchain address at any time, thanks to the decentralized nature of blockchain. This means they are also transparent.

Using blockchain technology, the team traced the flow of 2,000 ETH from Zhang’s Ethereum wallet to Yao Qian’s wallet in 2018, and also recorded the complete transaction of Yao Qian transferring out 370 ETH in 2021, exchanged for 10 million RMB. The team conducted electronic evidence collection in accordance with regulations, verifying and cross-checking evidence to form a complete chain. Faced with such a solid evidence chain, Yao Qian had no choice but to admit his disciplinary violations and illegal acts.

In November 2024, Yao Qian was expelled from the Party and removed from public office, and transferred to the procuratorate for legal review and prosecution. The successful handling of this case has accumulated experience for disciplinary and supervisory authorities in investigating virtual currency bribery cases. Virtual currencies may seem intangible and invisible, but once they are used in the real world, they cannot remain virtual; they will inevitably “appear.” The villa Yao Qian purchased was the “revealing agent” that exposed him. The layers of deception he carefully laid out ultimately could not prevent his exposure. When Yao Qian was detained, the villa’s renovation was not yet complete, and he had already lost the chance to move in.

Zou Rong: Virtual currencies are just strings of numbers; they are useless if not exchanged. When virtual assets turn into real assets, they become very easy to expose.

Using virtual currencies to hide illicit gains is just one form of new and covert corruption. Under the high-pressure anti-corruption stance, no matter how innovative or covert the methods become, as long as the core of corruption—power-money transactions—is targeted, and strict adherence to regulations and laws is maintained, with the full use of big data and information technology to enhance detection and investigation, the fight against corruption in all its forms will find no hiding place.