Welcome back, everybody. I am here solo today.
There's no Bennett Tomlin with me unfortunately.
So if you want to tune out and shut this off, I get it, he's a
more reasonable voice but I think it's important for me to
jump. Jump in today.
Do a podcast on child dong who was or is a crypto currency
exchange founder and OTC desk over the counter desk.
Trader in China and he just got sentenced to more.
He's about to be sentenced to roughly three years in prison.
Maybe less. This is been a really important
story for me. I've been covering it for a
really long time. Obviously their sources in China
itself that could probably figure out more details than I
can, but since I've been covering it for such a long
period of time, I felt that it was a good time to talk to you
guys about it. Reminisce over what has
happened. Talk about the history of job
dong and Reflect on how he ended up in prison.
So let's go back in time. The earliest I could find any
mention of Jo dong in criminal activity, is sometime around
2017. When a small newspaper in
Belgium referenced the fact that two brothers had been doing
these large transaction fees on top of these Bitcoin
transactions, it apparently was clear money, laundering
activity. The two brothers were arrested.
There was ninety thousand Euros. In cash on them and there was
300,000 Euros. Frozen apparently, they were
doing this business on behalf of Jiao Tong.
But of course, Jo dong wasn't in Belgium when this arrest took
place. So, at that point, you have to
ask yourself who is this Jo dong guy?
Why is he moving money in Belgium?
Like, what is happening here? And when you start to look into
who Jo dong is, you start to see this is a relatively big actor
in The cryptocurrency seen in China.
Americans Europeans, even though many of us myself included are
obsessed with Bitcoin and cryptocurrencies.
I think we don't quite fathom how important the Chinese market
is because it is more important than the American markets in the
European markets, arguably. But a lot of the mining goes on
there and while institutional investors and all of us are
important. There's a lot Of, there's a lot
of gambling going on in China and there's a lot of people
betting, a lot of money on these cryptocurrencies Jiao.
Tong was an important figure in the space.
He was an over-the-counter traitor.
He they call him Uncle dong. He was known, at least
temporarily is the over-the-counter traitor, king
of China for Bitcoin. So, so this guy was an important
figure and he was doing weird, Shady deals in Belgium within a
year of this association with criminal activity. 80 in Belgium
Jo dong seems to get in very tight with the bitfenix
executives. There's a picture circulating
right now online. If you look it up I'm sure
you'll see it. Giancarlo CC need the CFO a bit
finex, and tether hanging out with Jo dong, kind of an odd,
funny picture, but nonetheless it proves stature, right?
This guy has access to some of the more important Executives in
in the space. And there's reason to believe he
had the money cash flow power. To back up these.
These flexes that he was making, he was often leaving the
country, he was traveling abroad.
He was making big deals and he wasn't getting screwed over.
He wasn't screwing other people over.
So yeah, there was kind of this energy to it.
That jaw was the real deal that he had sway in China.
That he knew industry insiders that he was in tight with
important Executives and I'm sure there was truth to that but
he also was incredibly cocky if you look through his Twitter
timeline, if If you if you look at his Twitter timeline you just
can tell this man believes in the things he's saying and other
people, therefore, believe him as well.
If you've listened to the previous episodes of this
podcast then you've probably heard Ben and I talked about the
issues with crypto Capital core and how that affected tethering
bitfenix. If not, that's something to look
into crypto Capital core, the fake money Services business in
Panama, was handed over 850. And dollars of company and
client funds by bitfenix without a contract.
Those funds were frozen by multiple governments, afterward
tether and bitfenix haven't been able to retrieve those funds yet
once this was announced and it was announced because they
admitted that their tether token was not 100% backed due to this
lone child dong became the one in May of 2019 to announce what
bitfenix and tether called Eunice said Leo.
Ow. So this token still exists.
You can find it around. It was their token to alleviate
their debt. You could become not
shareholders, not Equity holders, really.
But this token was sort of designed to represent that kind
of, I don't know, the terms of service or muddled the point
being here that Jo dong was the one who announced this
aggrandized it and got other key players involved.
So soon after he did that people like Arthur Hays and others said
that they were into this idea and wanted to help.
Port the community and they raised the money they needed to
raise. I think they were trying to
raise a billion dollars. They claim.
They raise that amount of money within 10 minutes so they're key
supporter was Jo dong, it emerged around this time, that
xiaotong was a shareholder of some percentage in bitfenix and
tether. Likely the parent company did
for necks and so that would be the reason that he would be.
So apt to save them anyway to my shock and I think two other
Skeptics shock like Bennett but to To my shock, the
cryptocurrency community, didn't really care.
That tether wasn't 100% backed. They didn't care that.
It was seventy-four percent backed and this fundraiser
worked. So effectively, that really none
of these, none of these people Arthur Hays Jo dong and many
others included in that. Didn't fear show any fear, they
weren't where it didn't seem at least on the exterior.
Surface didn't seem to Worried about this at all, so much.
So in fact, that not within a few months Jo dong starts tether
un so tether, un is tethers, un derivative, but it isn't there's
two kinds of un. It gets a little weird for
people who aren't super familiar with currencies in general but
there's the mainland un which is valued a certain way and
articulated a certain way by the CCP.
And then there's Outsider un. So there's a un for people who
aren't on the mainland and those you under valued differently.
And so this tether un derivative use those outside un it also was
being held at a Belgium Bank. In the end, not very many of
these two other un were minted. It started in 2019 in 2019, it
got to its max amount, which was twenty, three million un and
that was it. Nothing ever happened with it.
And after that, Joe Kind of got quiet in 2020.
He wasn't so boisterous. He wasn't so cocky, he wasn't so
loud but Jo dong didn't have very long to be quiet because
soon enough the rumor mill in China started to whirl the rumor
that hit hardest was that Jo dong had taken a flight from
Japan, landed in China, and upon hitting the tarmac was almost
immediately. Arrested the response to this
rumor from exec other Executives at his company called Renren
bit. Was to deny this claim.
They said, this just isn't true. He's briefly being detained or
they add, they don't even think they use the word detained at
first. They said something along the
lines of he's fully cooperating with authorities, but then no
one heard from jowl in a week and a week became two weeks and
two weeks became three weeks. And then, that became months and
then no one was talking about cha dong anymore, but I still
wanted to know. I still wanted to know what was
going on, even though all seemingly all of his million
Besties had left him in the dust.
They didn't care anymore. They didn't want to talk about
him. They didn't want to say anything
about him when I would go into the run run bit telegram.
They also were trying not to talk about it in any public
fashion. They were saying they were
unaffected by anything that was going on with him.
They also wouldn't say what was going on with him.
No one knew what had happened to Jo dong, but at some point,
everyone kind of resigned to the fact that clearly he had been
arrested. David detained, whatever you
want to call it and that finally brings us to where we are today.
So after almost a year in prison or in jail without anyone
knowing what was going on with child dong, he was tried with 11
other defendants over a day and was found guilty guilty of
essentially money laundering and some other some other offenses
working with a Criminal Network, he was moving money through
casinos to launder it. The estimates.
The amount that he laundered are roughly 500 million dollars.
Three billion un that's a lot of money.
I honestly was worried about whether he would China tends to
have incredibly harsh sentences for white-collar criminals.
So the fact that the likely sentencing for Jo dong is going
to be three years or less. In prison is great.
I'm glad that that is the outcome.
I'm glad that he got caught doing something.
And that he shouldn't have been doing.
Because there are a lot of people involved in
cryptocurrency who think you can just do whatever you want.
Obviously Tran has a lot harsher than America is.
So if you're out there be cautious and be careful if
you're involved in cryptocurrency, I think that
more or less covers this story despite the fact that this is
taken over for four years or so to kind of transpire and I've
been following it for a very long time.
It only has taken me. Minutes or so to kind of discuss
a very clean summary of it. Hopefully if you want to dig
into this a little deeper I've written some articles about it.
You can find them ja dong the final word.
Another use case Bites the Dust. Why Jiao?
Tong is still important. Those are all my medium articles
there up. Protoss did a really good
article today on it so you can find some information out there
about this. If you want to find out more,
hopefully this gave you some insight and Bennett and I are
Planning on doing more of these sometime in the near future.
I know crypto Capital core is one of the topics we want to
discuss. There's probably several more
that it would just be fun for us to be able to discuss and share
with you guys. I'm hoping we can keep those
down in length to 1020 minutes, something like that, just kind
of short little discussions for you guys to listen to
occasionally. So try to keep us to our word on
that and I look forward to talking to you guys again soon.