1 00:00:05,000 --> 00:00:08,100 Welcome back, everybody. I am here solo today. 2 00:00:08,200 --> 00:00:10,900 There's no Bennett Tomlin with me unfortunately. 3 00:00:10,900 --> 00:00:14,700 So if you want to tune out and shut this off, I get it, he's a 4 00:00:14,700 --> 00:00:18,500 more reasonable voice but I think it's important for me to 5 00:00:18,500 --> 00:00:19,700 jump. Jump in today. 6 00:00:19,700 --> 00:00:26,300 Do a podcast on child dong who was or is a crypto currency 7 00:00:26,300 --> 00:00:30,500 exchange founder and OTC desk over the counter desk. 8 00:00:30,900 --> 00:00:35,300 Trader in China and he just got sentenced to more. 9 00:00:35,300 --> 00:00:38,200 He's about to be sentenced to roughly three years in prison. 10 00:00:38,200 --> 00:00:40,800 Maybe less. This is been a really important 11 00:00:40,800 --> 00:00:42,500 story for me. I've been covering it for a 12 00:00:42,500 --> 00:00:45,900 really long time. Obviously their sources in China 13 00:00:45,900 --> 00:00:49,300 itself that could probably figure out more details than I 14 00:00:49,300 --> 00:00:52,500 can, but since I've been covering it for such a long 15 00:00:52,500 --> 00:00:56,500 period of time, I felt that it was a good time to talk to you 16 00:00:56,500 --> 00:00:58,300 guys about it. Reminisce over what has 17 00:00:58,300 --> 00:00:59,900 happened. Talk about the history of job 18 00:00:59,900 --> 00:01:03,100 dong and Reflect on how he ended up in prison. 19 00:01:03,400 --> 00:01:06,400 So let's go back in time. The earliest I could find any 20 00:01:06,400 --> 00:01:10,300 mention of Jo dong in criminal activity, is sometime around 21 00:01:10,300 --> 00:01:14,700 2017. When a small newspaper in 22 00:01:14,700 --> 00:01:19,300 Belgium referenced the fact that two brothers had been doing 23 00:01:19,300 --> 00:01:23,500 these large transaction fees on top of these Bitcoin 24 00:01:23,500 --> 00:01:26,500 transactions, it apparently was clear money, laundering 25 00:01:26,500 --> 00:01:29,000 activity. The two brothers were arrested. 26 00:01:29,200 --> 00:01:33,300 There was ninety thousand Euros. In cash on them and there was 27 00:01:33,300 --> 00:01:36,500 300,000 Euros. Frozen apparently, they were 28 00:01:36,500 --> 00:01:38,500 doing this business on behalf of Jiao Tong. 29 00:01:38,900 --> 00:01:43,100 But of course, Jo dong wasn't in Belgium when this arrest took 30 00:01:43,100 --> 00:01:45,200 place. So, at that point, you have to 31 00:01:45,208 --> 00:01:47,500 ask yourself who is this Jo dong guy? 32 00:01:47,500 --> 00:01:49,800 Why is he moving money in Belgium? 33 00:01:49,800 --> 00:01:53,200 Like, what is happening here? And when you start to look into 34 00:01:53,200 --> 00:01:57,400 who Jo dong is, you start to see this is a relatively big actor 35 00:01:57,500 --> 00:02:00,500 in The cryptocurrency seen in China. 36 00:02:01,300 --> 00:02:05,900 Americans Europeans, even though many of us myself included are 37 00:02:05,900 --> 00:02:07,900 obsessed with Bitcoin and cryptocurrencies. 38 00:02:08,699 --> 00:02:13,600 I think we don't quite fathom how important the Chinese market 39 00:02:13,600 --> 00:02:20,300 is because it is more important than the American markets in the 40 00:02:20,300 --> 00:02:23,500 European markets, arguably. But a lot of the mining goes on 41 00:02:23,500 --> 00:02:28,100 there and while institutional investors and all of us are 42 00:02:28,100 --> 00:02:31,600 important. There's a lot Of, there's a lot 43 00:02:31,600 --> 00:02:33,800 of gambling going on in China and there's a lot of people 44 00:02:33,800 --> 00:02:38,400 betting, a lot of money on these cryptocurrencies Jiao. 45 00:02:38,400 --> 00:02:40,100 Tong was an important figure in the space. 46 00:02:40,100 --> 00:02:42,700 He was an over-the-counter traitor. 47 00:02:42,700 --> 00:02:47,000 He they call him Uncle dong. He was known, at least 48 00:02:47,000 --> 00:02:50,200 temporarily is the over-the-counter traitor, king 49 00:02:50,600 --> 00:02:54,000 of China for Bitcoin. So, so this guy was an important 50 00:02:54,000 --> 00:02:58,600 figure and he was doing weird, Shady deals in Belgium within a 51 00:02:58,600 --> 00:03:01,600 year of this association with criminal activity. 80 in Belgium 52 00:03:01,800 --> 00:03:06,300 Jo dong seems to get in very tight with the bitfenix 53 00:03:06,300 --> 00:03:08,400 executives. There's a picture circulating 54 00:03:08,400 --> 00:03:10,600 right now online. If you look it up I'm sure 55 00:03:10,600 --> 00:03:13,500 you'll see it. Giancarlo CC need the CFO a bit 56 00:03:13,500 --> 00:03:17,400 finex, and tether hanging out with Jo dong, kind of an odd, 57 00:03:17,400 --> 00:03:22,100 funny picture, but nonetheless it proves stature, right? 58 00:03:22,100 --> 00:03:26,200 This guy has access to some of the more important Executives in 59 00:03:26,200 --> 00:03:28,500 in the space. And there's reason to believe he 60 00:03:28,500 --> 00:03:32,600 had the money cash flow power. To back up these. 61 00:03:32,600 --> 00:03:36,000 These flexes that he was making, he was often leaving the 62 00:03:36,000 --> 00:03:37,500 country, he was traveling abroad. 63 00:03:37,500 --> 00:03:41,200 He was making big deals and he wasn't getting screwed over. 64 00:03:41,200 --> 00:03:42,800 He wasn't screwing other people over. 65 00:03:42,900 --> 00:03:45,500 So yeah, there was kind of this energy to it. 66 00:03:45,500 --> 00:03:48,100 That jaw was the real deal that he had sway in China. 67 00:03:48,100 --> 00:03:51,200 That he knew industry insiders that he was in tight with 68 00:03:51,200 --> 00:03:55,500 important Executives and I'm sure there was truth to that but 69 00:03:55,500 --> 00:03:59,900 he also was incredibly cocky if you look through his Twitter 70 00:03:59,900 --> 00:04:03,400 timeline, if If you if you look at his Twitter timeline you just 71 00:04:03,400 --> 00:04:08,300 can tell this man believes in the things he's saying and other 72 00:04:08,300 --> 00:04:09,900 people, therefore, believe him as well. 73 00:04:10,400 --> 00:04:12,600 If you've listened to the previous episodes of this 74 00:04:12,600 --> 00:04:16,600 podcast then you've probably heard Ben and I talked about the 75 00:04:16,600 --> 00:04:19,800 issues with crypto Capital core and how that affected tethering 76 00:04:19,800 --> 00:04:22,500 bitfenix. If not, that's something to look 77 00:04:22,500 --> 00:04:27,400 into crypto Capital core, the fake money Services business in 78 00:04:27,400 --> 00:04:32,500 Panama, was handed over 850. And dollars of company and 79 00:04:32,500 --> 00:04:35,500 client funds by bitfenix without a contract. 80 00:04:35,500 --> 00:04:39,600 Those funds were frozen by multiple governments, afterward 81 00:04:39,600 --> 00:04:43,700 tether and bitfenix haven't been able to retrieve those funds yet 82 00:04:44,100 --> 00:04:47,200 once this was announced and it was announced because they 83 00:04:47,200 --> 00:04:51,400 admitted that their tether token was not 100% backed due to this 84 00:04:51,400 --> 00:04:55,500 lone child dong became the one in May of 2019 to announce what 85 00:04:56,000 --> 00:05:00,600 bitfenix and tether called Eunice said Leo. 86 00:05:00,700 --> 00:05:02,100 Ow. So this token still exists. 87 00:05:02,100 --> 00:05:06,600 You can find it around. It was their token to alleviate 88 00:05:06,600 --> 00:05:08,200 their debt. You could become not 89 00:05:08,200 --> 00:05:10,800 shareholders, not Equity holders, really. 90 00:05:10,800 --> 00:05:14,700 But this token was sort of designed to represent that kind 91 00:05:14,700 --> 00:05:17,700 of, I don't know, the terms of service or muddled the point 92 00:05:17,700 --> 00:05:20,200 being here that Jo dong was the one who announced this 93 00:05:20,300 --> 00:05:23,600 aggrandized it and got other key players involved. 94 00:05:23,600 --> 00:05:27,900 So soon after he did that people like Arthur Hays and others said 95 00:05:27,900 --> 00:05:30,600 that they were into this idea and wanted to help. 96 00:05:30,700 --> 00:05:34,400 Port the community and they raised the money they needed to 97 00:05:34,400 --> 00:05:35,500 raise. I think they were trying to 98 00:05:35,500 --> 00:05:37,400 raise a billion dollars. They claim. 99 00:05:37,400 --> 00:05:40,300 They raise that amount of money within 10 minutes so they're key 100 00:05:40,300 --> 00:05:43,500 supporter was Jo dong, it emerged around this time, that 101 00:05:43,500 --> 00:05:48,200 xiaotong was a shareholder of some percentage in bitfenix and 102 00:05:48,200 --> 00:05:50,400 tether. Likely the parent company did 103 00:05:50,400 --> 00:05:54,500 for necks and so that would be the reason that he would be. 104 00:05:54,500 --> 00:05:58,200 So apt to save them anyway to my shock and I think two other 105 00:05:58,200 --> 00:06:02,000 Skeptics shock like Bennett but to To my shock, the 106 00:06:02,300 --> 00:06:05,100 cryptocurrency community, didn't really care. 107 00:06:05,100 --> 00:06:08,700 That tether wasn't 100% backed. They didn't care that. 108 00:06:08,700 --> 00:06:12,900 It was seventy-four percent backed and this fundraiser 109 00:06:12,900 --> 00:06:17,300 worked. So effectively, that really none 110 00:06:17,300 --> 00:06:21,800 of these, none of these people Arthur Hays Jo dong and many 111 00:06:21,800 --> 00:06:26,800 others included in that. Didn't fear show any fear, they 112 00:06:26,800 --> 00:06:29,700 weren't where it didn't seem at least on the exterior. 113 00:06:29,700 --> 00:06:32,600 Surface didn't seem to Worried about this at all, so much. 114 00:06:32,600 --> 00:06:38,300 So in fact, that not within a few months Jo dong starts tether 115 00:06:38,300 --> 00:06:42,800 un so tether, un is tethers, un derivative, but it isn't there's 116 00:06:42,800 --> 00:06:45,300 two kinds of un. It gets a little weird for 117 00:06:45,300 --> 00:06:48,600 people who aren't super familiar with currencies in general but 118 00:06:49,200 --> 00:06:53,700 there's the mainland un which is valued a certain way and 119 00:06:54,200 --> 00:06:57,000 articulated a certain way by the CCP. 120 00:06:57,900 --> 00:07:03,000 And then there's Outsider un. So there's a un for people who 121 00:07:03,000 --> 00:07:06,100 aren't on the mainland and those you under valued differently. 122 00:07:06,400 --> 00:07:11,000 And so this tether un derivative use those outside un it also was 123 00:07:11,000 --> 00:07:14,600 being held at a Belgium Bank. In the end, not very many of 124 00:07:14,608 --> 00:07:18,900 these two other un were minted. It started in 2019 in 2019, it 125 00:07:18,900 --> 00:07:22,800 got to its max amount, which was twenty, three million un and 126 00:07:23,100 --> 00:07:25,300 that was it. Nothing ever happened with it. 127 00:07:25,600 --> 00:07:29,600 And after that, Joe Kind of got quiet in 2020. 128 00:07:29,700 --> 00:07:32,100 He wasn't so boisterous. He wasn't so cocky, he wasn't so 129 00:07:32,100 --> 00:07:36,800 loud but Jo dong didn't have very long to be quiet because 130 00:07:36,800 --> 00:07:40,600 soon enough the rumor mill in China started to whirl the rumor 131 00:07:40,600 --> 00:07:44,100 that hit hardest was that Jo dong had taken a flight from 132 00:07:44,100 --> 00:07:49,000 Japan, landed in China, and upon hitting the tarmac was almost 133 00:07:49,000 --> 00:07:51,300 immediately. Arrested the response to this 134 00:07:51,300 --> 00:07:56,200 rumor from exec other Executives at his company called Renren 135 00:07:56,200 --> 00:07:58,700 bit. Was to deny this claim. 136 00:07:58,700 --> 00:08:03,300 They said, this just isn't true. He's briefly being detained or 137 00:08:03,300 --> 00:08:05,600 they add, they don't even think they use the word detained at 138 00:08:05,600 --> 00:08:06,800 first. They said something along the 139 00:08:06,800 --> 00:08:10,300 lines of he's fully cooperating with authorities, but then no 140 00:08:10,300 --> 00:08:14,200 one heard from jowl in a week and a week became two weeks and 141 00:08:14,200 --> 00:08:17,800 two weeks became three weeks. And then, that became months and 142 00:08:17,800 --> 00:08:21,300 then no one was talking about cha dong anymore, but I still 143 00:08:21,300 --> 00:08:23,800 wanted to know. I still wanted to know what was 144 00:08:23,800 --> 00:08:26,900 going on, even though all seemingly all of his million 145 00:08:27,100 --> 00:08:30,000 Besties had left him in the dust. 146 00:08:30,000 --> 00:08:31,800 They didn't care anymore. They didn't want to talk about 147 00:08:31,800 --> 00:08:33,299 him. They didn't want to say anything 148 00:08:33,299 --> 00:08:36,299 about him when I would go into the run run bit telegram. 149 00:08:36,900 --> 00:08:41,000 They also were trying not to talk about it in any public 150 00:08:41,000 --> 00:08:42,500 fashion. They were saying they were 151 00:08:42,500 --> 00:08:45,600 unaffected by anything that was going on with him. 152 00:08:45,900 --> 00:08:48,000 They also wouldn't say what was going on with him. 153 00:08:48,400 --> 00:08:52,200 No one knew what had happened to Jo dong, but at some point, 154 00:08:52,200 --> 00:08:56,100 everyone kind of resigned to the fact that clearly he had been 155 00:08:56,300 --> 00:08:58,800 arrested. David detained, whatever you 156 00:08:58,800 --> 00:09:02,300 want to call it and that finally brings us to where we are today. 157 00:09:02,300 --> 00:09:07,700 So after almost a year in prison or in jail without anyone 158 00:09:07,700 --> 00:09:11,600 knowing what was going on with child dong, he was tried with 11 159 00:09:11,600 --> 00:09:16,000 other defendants over a day and was found guilty guilty of 160 00:09:16,000 --> 00:09:19,200 essentially money laundering and some other some other offenses 161 00:09:19,400 --> 00:09:23,800 working with a Criminal Network, he was moving money through 162 00:09:23,800 --> 00:09:26,900 casinos to launder it. The estimates. 163 00:09:27,100 --> 00:09:31,100 The amount that he laundered are roughly 500 million dollars. 164 00:09:31,100 --> 00:09:33,700 Three billion un that's a lot of money. 165 00:09:34,100 --> 00:09:39,100 I honestly was worried about whether he would China tends to 166 00:09:39,100 --> 00:09:43,100 have incredibly harsh sentences for white-collar criminals. 167 00:09:43,500 --> 00:09:47,800 So the fact that the likely sentencing for Jo dong is going 168 00:09:47,800 --> 00:09:51,000 to be three years or less. In prison is great. 169 00:09:51,200 --> 00:09:53,500 I'm glad that that is the outcome. 170 00:09:54,200 --> 00:09:56,900 I'm glad that he got caught doing something. 171 00:09:57,000 --> 00:09:58,600 And that he shouldn't have been doing. 172 00:09:58,600 --> 00:10:01,900 Because there are a lot of people involved in 173 00:10:01,900 --> 00:10:04,500 cryptocurrency who think you can just do whatever you want. 174 00:10:04,600 --> 00:10:08,300 Obviously Tran has a lot harsher than America is. 175 00:10:08,700 --> 00:10:13,200 So if you're out there be cautious and be careful if 176 00:10:13,200 --> 00:10:15,400 you're involved in cryptocurrency, I think that 177 00:10:15,400 --> 00:10:18,600 more or less covers this story despite the fact that this is 178 00:10:18,600 --> 00:10:23,500 taken over for four years or so to kind of transpire and I've 179 00:10:23,500 --> 00:10:25,200 been following it for a very long time. 180 00:10:25,500 --> 00:10:28,500 It only has taken me. Minutes or so to kind of discuss 181 00:10:28,500 --> 00:10:31,700 a very clean summary of it. Hopefully if you want to dig 182 00:10:31,700 --> 00:10:34,600 into this a little deeper I've written some articles about it. 183 00:10:34,600 --> 00:10:37,900 You can find them ja dong the final word. 184 00:10:38,100 --> 00:10:40,800 Another use case Bites the Dust. Why Jiao? 185 00:10:40,800 --> 00:10:43,600 Tong is still important. Those are all my medium articles 186 00:10:43,900 --> 00:10:46,800 there up. Protoss did a really good 187 00:10:46,800 --> 00:10:51,300 article today on it so you can find some information out there 188 00:10:51,600 --> 00:10:53,300 about this. If you want to find out more, 189 00:10:53,600 --> 00:10:56,900 hopefully this gave you some insight and Bennett and I are 190 00:10:57,000 --> 00:10:59,800 Planning on doing more of these sometime in the near future. 191 00:11:00,200 --> 00:11:03,600 I know crypto Capital core is one of the topics we want to 192 00:11:03,608 --> 00:11:06,100 discuss. There's probably several more 193 00:11:06,100 --> 00:11:08,900 that it would just be fun for us to be able to discuss and share 194 00:11:08,900 --> 00:11:11,100 with you guys. I'm hoping we can keep those 195 00:11:11,100 --> 00:11:14,500 down in length to 1020 minutes, something like that, just kind 196 00:11:14,500 --> 00:11:17,100 of short little discussions for you guys to listen to 197 00:11:17,300 --> 00:11:20,100 occasionally. So try to keep us to our word on 198 00:11:20,100 --> 00:11:22,900 that and I look forward to talking to you guys again soon.