China Declares Crypto Futures Trading as Illegal Gambling

China’s People’s Court of Pingjiang County, Hunan Province, has ruled that crypto futures trading constitutes illegal gambling, marking a major crackdown on the country’s digital asset market.

Key Takeaways

Crypto Futures = Gambling: The court convicted BKEX exchange employees for operating an illegal gambling platform under China’s anti-gambling laws.
BKEX Investigation: The exchange reportedly had 270,000 users, generating $54.7 million in profits before being shut down.
Stricter Regulations: China continues to tighten crypto laws, despite previous rulings recognizing crypto as legal property.
Industry Impact: The ruling could push crypto trading further underground or force platforms to move operations overseas.

BKEX Exchange: The Case at a Glance

Founded in 2018 by Ji Jiaming, BKEX started as a spot trading exchange but later introduced futures trading with up to 1,000x leverage.

Between 2019 and 2022, BKEX changed its corporate identity multiple times before being dissolved.
In 2021, it launched perpetual contract trading, allowing users to bet on Bitcoin (BTC) and Ethereum (ETH) price movements.
The court determined this model was gambling, citing its highly speculative nature.
With founder Ji Jiaming on the run, the court targeted employees and agents in its ruling.

Convictions & Sentences

Zheng Lei (Wallet Engineer & Department Head):
- 25-month suspended sentence, 150,000 yuan fine (~$30,000)
- 1.34 million yuan in illegal earnings confiscated
Wang (KYC & Transactions Supervisor):
- 23-month suspended sentence, 52,000 yuan fine (~$10,000)
Dong (User Recruitment Agent):
- Recruited 10,000+ sub-agents, earned 33,558 USDT in rebates
- 18-month suspended sentence, 35,000 yuan fine (~$6,400)

China’s Evolving Crypto Crackdown

China has maintained a hard stance on crypto, banning crypto exchanges, mining, and ICOs over the years. However, the legal status of digital assets remains complex:

2022 High Court Ruling: Recognized crypto as legal property.
2025 BKEX Ruling: Classifies futures trading as gambling, creating legal contradictions.

Despite these regulations, crypto adoption remains high in China, with investors turning to decentralized and offshore exchanges. Asia still leads in crypto usage, accounting for 60% of global users.