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Illegal Gambling Charges – Chinese authorities found BKEX staff guilty of facilitating illegal gambling by offering crypto contract trading, which was deemed speculative and unlawful under China’s strict financial regulations.
Crackdown on Crypto Platforms – The conviction highlights China’s continued crackdown on cryptocurrency-related activities, reinforcing its stance against unregulated digital asset trading and financial risks.
Implications for Crypto Exchanges – The case sets a precedent for other platforms operating in China, signalling stricter enforcement and legal consequences for offering unauthorised financial services involving crypto.
In a landmark case underscoring China’s ongoing regulatory crackdown on cryptocurrency-related activities, several employees of BKEX, a crypto exchange, have been convicted for their involvement in illegal gambling operations.
On January 29 2025, the People’s Court of Pingjiang County in Hunan Province concluded that BKEX’s contract transactions were effectively a form of online gambling. As a result, those involved were found guilty of “opening a casino.” The court ruling found that the accused facilitated gambling through crypto contract trading, a practice deemed illegal under Chinese law. This case highlights the risks of unregulated digital asset platforms and China’s stringent measures to curb illicit financial activities.
BKEX, a digital asset trading platform headquartered overseas, was implicated in offering leveraged crypto contracts that allegedly enabled users to place speculative bets akin to gambling. According to Chinese authorities, these contracts functioned similarly to traditional gambling mechanisms, where participants risked substantial sums hoping for outsized returns. The court deemed this activity unlawful, leading to significant legal consequences for those involved.
The trial in a Chinese court concluded with guilty verdicts for multiple BKEX employees, including key managerial personnel. The charges stemmed from their roles in promoting and operating crypto contract trading, which the authorities classified as illegal gambling. Reports indicate that the convicted staff members received sentences ranging from several months to multiple years in prison, alongside hefty fines.
China has maintained a firm stance against crypto trading and related financial services, banning domestic exchanges and prohibiting banks from facilitating crypto transactions. This latest case reflects Beijing’s unwavering commitment to eliminating illegal financial activities linked to digital assets.
The conviction of BKEX employees marks another significant move in China’s continued efforts to aggressively regulate the crypto industry. Market analysts believe this case could set a precedent for how China handles future violations involving crypto exchanges and digital asset platforms. One of the primary concerns this ruling raises is its potential impact on offshore exchanges that still cater to Chinese users despite the country’s stringent restrictions.
Many such platforms operate in legal grey areas, and the BKEX case demonstrates that authorities are willing to take legal action against individuals associated with these services, even if the platforms themselves are based outside China. Furthermore, the crackdown may discourage crypto exchanges from engaging with Chinese traders, leading to declining Chinese trading activity.
This could drive more users towards decentralised finance (DeFi) platforms, which operate without centralised control and are more challenging to regulate. As China tightens its grip on digital finance, industry experts suggest that crypto firms exercise caution when operating in jurisdictions with stringent regulatory environments. The BKEX case is a stark reminder that compliance with local laws is crucial to avoiding severe legal repercussions. With global regulators increasingly scrutinising the cryptocurrency industry, exchanges must prioritise transparency and adherence to legal frameworks to ensure long-term viability.
The conviction of BKEX staff for illegal gambling through crypto contract trading underscores China’s commitment to enforcing its financial regulations. This development will likely reverberate throughout the industry, prompting crypto exchanges to reassess their operations in markets with strict regulatory controls. As the global crypto landscape evolves, regulatory compliance will remain a key factor in determining the sustainability of digital asset platforms.
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