Yao Qian, former head of the Department of Science and Technology Supervision of the China Securities Regulatory Commission (CSRC) and a key figure in the development of China’s digital currency, is now at the center of a cryptocurrency-related corruption scandal.
He was expelled from the Communist Party and removed from public office after being accused of using virtual currencies to facilitate bribery.
The charges, announced by the Central Commission for Discipline Inspection (CCDI) and the National Supervision Commission, include allegations of serious abuses, including abusing his position for personal financial gain and engaging in improper transactions with technology providers.
Yao’s fall marks a dramatic turnaround for a figure who was once lauded for his contributions to China’s digital finance ambitions.
Yao Qian is accused of using virtual currencies to “exchange power for money,” indicating his involvement in corrupt deals under the guise of blockchain and cryptocurrency transactions.
According to the CCDI report, Yao manipulated regulators to benefit specific technology service providers. He allegedly facilitated business expansion, software and hardware purchases and other illegal transactions by abusing his influence.
The report also detailed other serious violations of discipline, including accepting expensive gifts, holding luxury banquets and seeking benefits in employee recruitment.
In some cases, Yao allegedly diverted personal expenses to supervised entities, borrowed large sums of money illegally and invested in companies, accepting bribes worth an “unusually large” amount.
Yao’s alleged misconduct included establishing contacts with individuals described as “key training targets” for illegal activities. This, combined with his participation in superstitious practices – a cultural taboo in Communist Party rule – solidified accusations of deviation from Party disciplinary rules.
The rise and fall of Yao Qian
Yao Qian’s trajectory is full of sharp contrasts. As the first director of the People’s Bank of China’s (PBoC) Digital Currency Research Institute, he laid the foundation for the Chinese central bank’s (CBDC) digital currency, the digital yuan.
His technical expertise and deep understanding of blockchain technology have earned him recognition as a key player in China’s ambitious drive to dominate the global fintech landscape. Yao’s writings and public comments have revealed his vision of a blockchain-based future in which centralized and decentralized systems could coexist.
He advocated the integration of digital currency attributes into existing banking systems, an approach that demonstrated his understanding of the technical and economic dimensions of digital currencies. However, Yao’s tenure coincided with China’s increasingly stringent regulatory measures against cryptocurrencies.
Although he was considered an outspoken supporter of innovation, regulatory repression often contradicted his progressive stance. Yao Qian’s prosecution casts a shadow over China’s digital currency program, which has positioned itself as a pioneer in the global race for CBDC adoption.
His involvement in corrupt practices, particularly through the virtual currency, reveals gaps in CBDC integration within the existing governance framework. Cryptocurrency as a medium for bribery is part of growing concerns about its misuse in illegal activities.
Recently, BIT Mining, formerly 500.com, reached a settlement in a U.S. SEC case, agreeing to pay a civil penalty of $4 million for violating the Foreign Corrupt Practices Act (FCPA).
Between 2017 and 2019, the company engaged in cryptocurrency bribery to obtain a license to develop an integrated resort (IR) in Japan after legalized gambling.
Bribes of $2.5 million were allegedly paid to Japanese officials, including members of parliament, through sham consulting contracts and other illegal means.
