A senior Chinese official once at the centre of the country’s digital currency strategy has fallen after investigators traced millions of euros’ worth of Ethereum used to conceal bribes. The case of Yao Qian, former head of the People’s Bank of China’s digital currency research institute, offers a stark reminder that blockchain-based assets can leave enduring trails, even when used for corruption.
Chinese state media this week detailed how Yao, later a senior official at the China Securities Regulatory Commission, received large bribes in virtual currency while abusing his regulatory influence. The most striking transaction involved 2,000 ether received in 2018, later valued at more than RMB 60 million, paid as a reward for helping facilitate a token issuance and financing project.
According to investigators, Yao relied on the perceived anonymity of cryptocurrencies to hide illicit income. Funds were routed through intermediaries, temporary wallet addresses and hardware wallets, before being partially converted into fiat currency. One traced conversion of 370 ether in 2021 produced roughly RMB 10 million, later used toward the purchase of a luxury Beijing villa registered in a relative’s name.
The investigation, led by anti-corruption authorities, combined traditional financial scrutiny with blockchain analysis. Officials recovered a hardware wallet and mnemonic phrases from Yao’s office, then reconstructed the full on-chain transaction history linking the original bribe to later property payments. The case ultimately closed the loop between virtual assets and real-world consumption.
Yao was expelled from the Communist Party and dismissed from public office in late 2024. Prosecutors are now pursuing criminal charges.
Beyond its domestic political significance, the case carries broader implications for digital money debates. Chinese authorities framed it as evidence that cryptocurrencies enable “new-type, hidden corruption” while also emphasising that decentralised ledgers are permanently auditable. Once crypto assets are converted into property, cash or other tangible goods, anonymity erodes rapidly.
For central banks globally, including those designing retail CBDCs, the episode reinforces a key policy argument. Digital money systems, whether public or private, ultimately depend on interfaces with the real economy. Oversight, traceability and enforcement do not disappear simply because value moves on-chain.
In that sense, the downfall of a former digital currency architect underscores a paradox familiar to regulators in Europe as well. Crypto may obscure identities temporarily, but it rarely offers a clean exit. The ledger, sooner or later, remembers.