A Chinese official Will Be Spending Life In Prison After Selling State Secrets to Cover Crypto Losses

On Friday, Chinese authorities announced that a public servant, burdened with significant debts from unsuccessful cryptocurrency investments, has been sentenced to life in prison for allegedly selling state secrets to an unidentified foreign intelligence agency.

In a post on Baidu, China’s Ministry of State Security (MSS)—the country’s intelligence and secret police arm—revealed that the official, identified only as “Wang Moumou,” was recruited after posting about his financial difficulties online.

According to the MSS, Wang had posted in an online forum seeking part-time work to manage his debts, disclosing his position as a public servant. Shortly after, he was contacted by a foreign individual who offered a generous payment in exchange for insider information, including details on his organization’s research progress and production tasks.

Initially, Wang shared minor internal information for a reward. However, the MSS explained that his actions soon escalated: “As he realized ‘a few photos and documents could bring in substantial money,’ his rational judgment faded. Greed and the hope of avoiding detection overtook him, leading to increasingly audacious activities.”

The MSS reported that Wang ultimately provided “top-secret and confidential national information” to foreign agents, for which he received over 1 million yuan ($138,000) via virtual currency recharges and other trade methods. While Wang’s specific workplace was not disclosed, it was described as a “classified institution” (某涉密单位)—a term used by Chinese authorities to denote national security organizations spanning from research departments to the MSS itself.

The failure to enforce proper security protocols

The MSS statement on Baidu also cited lax security measures at Wang’s workplace as a factor enabling the theft and leak of classified information. Regulations in China mandate stringent controls over sensitive information, including registering, counting, and signing off classified documents. But it seems that Wang's office failed to enforce these standards, making it easy for him to access and disseminate confidential materials without raising alarm bells.

In response, the National Security Agency ordered Wang's department to enhance its confidentiality measures and enforce stricter oversight, underscoring the serious breach of security protocols that allowed such a case to unfold.

Chinese law imposes severe penalties for espionage, with sentences ranging from ten years to life in prison. Wang's life sentence and the stripping of his political rights align with these strict regulations, reflecting China's zero-telerance stance on security breaches.

Wang's case joins a list of recent crypto-related crimimal prosecutions in China. Recently, authorities extradited Zhang Moumou, the mastermind behind a $14 billion crypto pyramid scheme, under the China-Thailand extradition Treaty. Moreover, Taiwan has also reported espionage cases funded by cryptocurrency, with several military personnel convicted of selling secrets to Chinese intelligence agents in exchange for digital payments.