July 24, 2025 – Two high-profile internet corporate fraud cases have surfaced, highlighting systemic vulnerabilities in digital governance:
1. Former Ele.me CEO and logistics head were found by Shanghai police to have accepted 40 million RMB in commercial bribes during their tenure, with cash concealed across multiple rental properties.
2. A Beijing-based short video platform executive allegedly embezzled 140 million RMB by manipulating incentive policies and approval processes, converting funds into Bitcoin for concealment.
These cases exemplify three critical patterns in modern corporate crime: abuse of power, illicit profit schemes, and asset obfuscation. While traditional internet companies face governance audits, Web3 projects operating in regulatory gray zones present heightened risks due to decentralized structures and ambiguous accountability frameworks.
Legal practitioner Shao Shiwei reports two representative Web3 cases:
Case A: A technical partner diverted millions in project funds to cryptocurrency trading without authorization, resulting in total loss. The financing partner subsequently initiated legal action for embezzlement.
Case B: A core developer replicated proprietary quantitative trading systems before resignation, establishing a competing venture. The company pursued criminal charges for trade secret theft and misappropriation.
Five key challenges hinder Web3 fraud prosecution:
1. Policy constraints under China’s cryptocurrency prohibitions
2. Judicial unfamiliarity with blockchain business models
3. Victims’ reluctance to engage authorities due to regulatory concerns
4. Jurisdictional ambiguities in cross-border operations
5. Industry culture prioritizing profit over compliance
Notable progress includes:
– Beijing authorities recovering 89 million RMB in Bitcoin from the video platform case
– Shenzhen courts sentencing a blockchain engineer to two years for code manipulation
– Major exchanges (Binance, OKX, Bitget) establishing formal law enforcement cooperation channels
While Web3’s decentralized nature doesn’t eliminate human malfeasance, evolving judicial capabilities and platform transparency measures indicate gradual industry maturation. Establishing clear governance standards remains imperative for sustainable sector development.
Disclaimer: This analysis represents the author’s professional perspective and does not constitute legal advice or investment guidance.
