Chinese Intelligence Officers Used Bitcoin in Scheme to Undermine Investigation, US Officials Allege

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Two intelligence officers working for the People's Republic of China allegedly tried bribing a U.S. government official with bitcoin in an effort to collect information about a prosecution against an unnamed company, the Department of Justice announced Monday.

According to a press release and an unsealed deposition, Guochun He and Zheng Wang tried to collect information about an ongoing legal effort against the company, which appears to be Huawei Technologies, a multinational tech company headquartered in Shenzhen, China. Prosecutors are alleging the pair tried to obstruct the investigation, including by attempting to bribe a U.S. law enforcement official with $61,000 worth of bitcoin.

U.S. Attorney General Merrick Garland tied the announcement to two other actions taken by prosecutors in New York and New Jersey, who announced charges against a number of individuals working for the Chinese government on various surveillance and harassment allegations.

A deposition, signed by FBI Supervisory Special Agent Thomas Ryder, mentions the bitcoin aspect of the case numerous times, saying He called it a "safe" method of paying the law enforcement official, referred to in the document as GE-1.

"With respect to converting the bitcoin payment to cash, He wrote: 'I suggest you do it in gambling house, I know in some house of Las Vegas can make it, it will be private and safe. Please waiting for my further information,'" according to the deposition.

The defendants paid GE-1 in two different tranches, one for $20,000 and the other for $41,000, according to the deposition. One of the transactions was for a document that was supposed to help Huawei's case and was classified, though the U.S. official did not actually share any classified material, the filing said.

Still, while the amount used was not a lot, U.S. officials Monday said the action was part of a broader picture about the Chinese government and its purported effort to undermine international laws and individuals' rights.

"The Justice Department will not tolerate attempts by any foreign power to undermine the rule of law upon which our democracy is based. We will continue to fiercely protect the rights guaranteed to everyone in our country, and we will defend the integrity of our institutions," Garland said during a press conference.