Colin Wu confirms arrest in China of Zhao Dong, major Bitfinex and Binance investor

Since June 24, Zhao Dong, founder of RenrenBit, a Chinese crypto company and a major investor in Bitfinex and Binance, has been arrested and is under investigation, according to journalist Colin Wu, citing his own sources.

Exclusive: Zhao Dong, once the largest OTC businessman in China, was rumored to be sentenced to 15 years in prison today. The reporter learned from multiple channels that this is a rumor. Zhao Dong is still under investigation. pic.twitter.com/J8KKbS6TAt

— Colin Wu（WuBlockchain） (@WuBlockchain) September 29, 2020

Reports of the arrest of one of China’s largest off-exchange cryptocurrency traders emerged in early July. Dong’s company denied them.

Wu described rumors that, on September 29, Dong was sentenced to 15 years in prison as rumors, but noted that he indeed faces criminal liability.

According to Wu, Dong is accused of receipt and concealment of criminal proceeds and of conducting illegal business operations. This is a common practice by authorities against OTC traders. The indictment alleges that he knowingly accepted criminal funds, Wu said.

He reminded that RenrenBit founder is an early investor and a major shareholder in Binance, who previously oversaw the exchange’s yuan-denominated OTC business.

Dong is also a shareholder of Bitfinex and Tether. In addition to OTC trading he was involved in lending and investing, and his ties with the stablecoin issuer allowed Dong to borrow funds from it at low rates, Wu stressed.

According to the journalist, the entrepreneur’s business has practically ground to a halt following the arrest.

Earlier, the People’s Bank of China compiled a blacklist of accounts of major traders on local crypto OTC platforms. Those named will lose access to online banking for five years.

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