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By Michael Forsythe and Gabriel J. X. Dance
Jerry Yu has the attributes of what the Chinese call the second generation rich. He has a high school education in Connecticut. He lives in a Manhattan condo purchased for $8 million from Jeffrey R. Immelt, the former leader of General Electric. the majority owner of a Bitcoin mine in Texas, acquired last year for more than $6 million.
Mr. Yu, a 23-year-old student at New York University, has also become, rather accidentally, an examined case on how Chinese citizens can move cash from China to the United States without attracting the attention of either country’s government.
The Texas facility, a giant knowledge center, didn’t buy in dollars. Instead, he bought with a cryptocurrency, which provides anonymity, and the transaction is routed through an offshore exchange, preventing anyone from knowing the source of the funding.
Such secrecy allows Chinese investors to access the U. S. banking formula and consequent oversight by federal regulators, as well as circumvent Chinese restrictions on cash leaving China. In a more classic transaction, a bank receiving the budget would know where it came from and would be required by law to report any suspicious activity to the U. S. Treasury.
None of this would have been known if Mr. Yu (BitRush Inc. , also known as BytesRush) hadn’t stumbled upon some clutter in the small region of the Texas Panhandle, the town of Channing, which has a population of 281, where contractors say they were not fully paid for their paintings in mine there.
A wave of lawsuits over the paintings has uncovered documents shedding light on deals that were not made public, as Chinese investors have flocked to the United States, spending hundreds of millions of dollars to build or operate cryptocurrency mines, after the Chinese government banned such operations. in 2021.
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