CMO Scandal: $45M stolen government funds allegedly lost on 100X leverage
The blockchain security company Beosin has been the focus of a major scandal after its Chief Marketing Officer Gao Ziyang was taken into custody and charged with embezzlement of state-owned assets. He is alleged to have been using government funds to short BTC, though unsuccessful action resulting in a massive liquidation of over $45 million dollars.
Beosin, also known as Lianan Tech, has worked with Chinese authorities and was helping them investigate fraudulent fundraising schemes. After the seizure of funds back in 2020, Beosin was assigned to store and sell the assets, to be later given back to the state treasury. Instead of selling the assets, CMO Gao Ziyang allegedly opened a short position in late August, expecting to increase the size of the positions for personal gain. At the time, BTC was trading roughly around $12,000.
Authorities state that records obtained from OKEx exchange shows the position began using 10x leverage, before increasing to 100x, and eventually ended up in liquidation. They started to ask about the whereabouts of the funds, before finally realizing that the assets were moved somewhere else and no longer in the wallet.
People are wondering at the age of Gao Ziyang, who is identified in his twenties. The reputation of Beosin, which was once regarded as a credible blockchain security company in the country, is now in serious doubt.