The young man who owned a Bitcoin miner in Texas and kept it a secret for years

The 23-year-old student kept his investment in the mine a secret until he was sued PHOTO: AFP

Jerry Yu, a 23-year-old New York University student, went from young student to financial mystery when his role as the majority owner of a Texas bitcoin mine was revealed. The young man kept the financial transaction secret for years and is now under the scrutiny of the law.

For a while

Yu’s profile resembles what the Chinese call a “second-generation rich”, with an education at a prestigious prep school in Connecticut and ownership of a luxury Manhattan apartment sold by Jeffrey R. Immelt, former CEO of General Electric, for the significant sum of US$8,000,000 . The real surprise, however, is his involvement in the world of cryptocurrencies, most notably as the majority owner of a Texas-based Bitcoin mine purchased last year for over $6,000,000.

What makes Jerry Yu even more intriguing is how he managed to transfer funds from China to the US without attracting the attention of authorities in both countries. The Texas Bitcoin mine was purchased using cryptocurrencies, which provide a high degree of anonymity for transactions. According to the New York Times, he used an offshore exchange to do this, thus avoiding oversight from US federal regulators and Chinese restrictions on moving money out of the country.

This strategy, although effective in maintaining financial secrecy, accidentally came to light when Yu’s company, BitRush Inc. (also known as BytesRush), faced legal problems in the small town of Channing, Texas. Local contractors said they were not fully paid for their services to build a bitcoin mine, prompting a series of lawsuits that shed light on unusual financial transactions carried out by Chinese investors in the United States.

Bitcoin miners, a staple in the cryptocurrency world

Cryptocurrency mines like Channing’s serve as specialized computing centers that generate Bitcoin by solving complex mathematical problems. These sites, despite their importance in the cryptocurrency market, have also attracted the attention of authorities due to their energy consumption and possible impact on national security.

The lawsuit, filed by Texas-based Crypton Mining Solutions, alleges that investors in the Chenning mine are “Chinese nationals with highly influential political and business positions.” While the lawsuit does not provide conclusive evidence of these connections, it does raise questions about possible connections between Chinese cryptocurrency investments and prominent political figures in China.

A key element in this story is the use of a cryptocurrency peg and the participation of the Binance cryptocurrency exchange. The transaction carried out through Binance became virtually untraceable due to the exchange’s failure to comply with US banking regulations at the time of the transaction. Binance recently pleaded guilty to violating anti-money laundering regulations and agreed to pay more than $4.3 billion in fines and forfeiture.

Read more in El Tiempo.

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