Original Author: Ma He, Foresight News

In January 2026, Xunlei and its subsidiary Wangxin Technology filed a civil lawsuit against Chen Lei and his core team, claiming "damages to company interests" with a recovery amount as high as 200 million yuan. The case has been accepted and filed by the relevant court in Shenzhen.

This lawsuit stems from a series of allegations in 2020, including Chen Lei's suspected embezzlement of company assets through fictitious transactions and false contracts, as well as misappropriating tens of millions of funds for illegal cryptocurrency trading. To evade investigation, Chen Lei left the country in early April 2020 and remained overseas for a long time, leading to the criminal investigation being withdrawn due to difficulties in gathering evidence.

This incident not only exposed the internal governance chaos within Xunlei but also reflected the rampant growth and regulatory risks faced by early Chinese internet companies venturing into the cryptocurrency space.

Chen Lei began learning programming in high school, was admitted to Tsinghua University’s Computer Science Department for college, pursued further studies in the United States, and gained experience at Google and Microsoft before returning to join Tencent. Chen Lei is a typical example of a technical elite.

In 2014, he joined Xunlei as Chief Technology Officer (CTO) when the company was facing a decline in its download business. As a former Microsoft employee, Chen Lei was skilled in distributed computing and cloud computing technologies, which aligned with Xunlei's core P2P download model. From 2015 to 2017, he served as co-CEO of Xunlei and officially became CEO and a board member in July 2017.

At this time, a global blockchain boom was emerging, with Bitcoin prices soaring and Chinese companies exploring this new field. Chen Lei led Xunlei's transformation towards blockchain, viewing it as the key to the company's revival.

Wankeyun: From Glory to Decline

Xunlei's flagship product in the cryptocurrency space was "Wankeyun." In October 2017, Xunlei launched the Wankeyun hardware, a smart shared storage device that rewarded users with "Wankey Coins" for contributing idle bandwidth and storage resources.

This model quickly ignited the market, with Wankeyun sales surging and the price of Chainke skyrocketing hundreds of times. At one point, Wankeyun devices generated over 100 million yuan in a single day, and the originally priced 399 yuan device was resold for as much as 3000 yuan. The initial unofficial opening price of Chainke was 0.1 yuan, which peaked at nearly 10 yuan.

Chen Lei repeatedly emphasized in public that this was Xunlei's innovation of "shared economy + blockchain," aimed at building a distributed computing ecosystem. Xunlei also established a blockchain laboratory to promote projects like Onething Chain, attempting to secure a position in decentralized storage and computing.

However, at the end of 2017 and the beginning of 2018, due to the 94 ban and announcements from the China Internet Finance Association, Wankey Coin was renamed "Chainke." The price of Chainke continued to decline, leading to some investors seeking to protect their rights.

Misappropriating Tens of Millions for Cryptocurrency Trading

Thanks to its blockchain initiatives, Xunlei's stock price once soared from 4 dollars to 27 dollars.

Chen Lei's foray into the cryptocurrency space seemed successful but harbored hidden dangers: company resources were tilted towards blockchain, internal management was lax, and the flow of funds was unclear. By 2019, Xunlei's blockchain business faced bottlenecks. The global cryptocurrency market was correcting, Chinese regulations were tightening, and Wankeyun sales were declining. Chen Lei attempted to expand edge computing through the subsidiary Wangxin Technology, but internal conflicts began to surface.

According to insiders, Chen Lei had a close relationship with then Senior Vice President Dong Xue, who recruited several fellow townsmen and relatives from Heilongjiang into key positions, forming a "small circle."

This provided fertile ground for subsequent corruption allegations. In April 2020, Xunlei's board suddenly dismissed Chen Lei, citing suspected embezzlement. The new management's audit revealed that Chen Lei had transferred funds through his actual control of "Xingronghe" (a bandwidth supplier for Xunlei). Xingronghe was established in 2019 and frequently transacted with Wangxin Technology. Chen Lei was suspected of inflating transaction links and fabricating false contracts to misappropriate approximately 200 million yuan of company funds.

More notably, there were allegations of misappropriating funds for cryptocurrency trading. Audits indicated that Chen Lei allegedly misappropriated tens of millions of company funds for illegal cryptocurrency trading activities, which are explicitly prohibited by the state.

Specific details include: through trusted associates like Dong Xue, he placed personnel in finance, procurement, and other departments to create false reimbursements and overpaid salaries, with funds ultimately flowing into the cryptocurrency market. At that time, Bitcoin prices were rebounding from a low point in early 2020, which Chen Lei may have exploited for speculation. This behavior violated China's ban on virtual currency trading and was suspected of embezzlement.

Additionally, Chen Lei and Dong Xue had a child during their tenure, and their relationship was not merely that of colleagues, further intensifying suspicions of interest transfer.

Public information shows that Dong Xue previously served as Senior Vice President of Xunlei Group and Vice President of Marketing at Wangxin Technology, overseeing core departments such as business market and human resources, directly reporting to then CEO Chen Lei. The two had intersected during their early days at Tencent Cloud Computing (Dong Xue was once a regular public relations staff member at Tencent Cloud). After Chen Lei joined Xunlei in 2014, Dong Xue gradually rose through the ranks, becoming one of his important confidants. There were internal rumors during Chen Lei's tenure that the two were in a romantic relationship (or an improper relationship).

The Xunlei board had previously asked Chen Lei directly, and he assured them of their "Christian reputation," claiming they were merely colleagues with no other relationship.

However, after Chen Lei's dismissal, company audits and investigations revealed that Chen Lei and Dong Xue had a child during their tenure at Xunlei. This directly contradicted Chen Lei's previous assurances and confirmed their close personal relationship, forming a tight-knit community of interests.

To evade investigation, Chen Lei left the country in early April 2020 with Dong Xue, transferring shares at a low price to relatives, making it difficult for Xunlei to hold them accountable.

In October 2020, Xunlei reported Chen Lei and others to the Shenzhen Public Security Bureau for suspected embezzlement, and the police opened an investigation. The company announced a call for Chen Lei to return to the country to cooperate, but to no avail. The criminal case was withdrawn at the end of 2022 due to Chen Lei's overseas stay and difficulties in gathering evidence.

Five years later, in 2026, Xunlei restarted the civil lawsuit, with the focus still on fund transfers and misappropriation for cryptocurrency trading. New evidence shows that Chen Lei dismissed dozens of core employees before his dismissal, leading to talent loss and compensation losses.

If the case is won, it could provide a model for corporate governance in China. Chen Lei's journey from Xunlei's blockchain innovation to the alleged misappropriation of funds for cryptocurrency trading reflects the opportunities and traps of the early cryptocurrency space. Xunlei once revived itself through the blockchain concept but collapsed due to regulatory issues and internal corruption. Chen Lei's case serves as a warning that technological innovation must comply with regulations, and personal ambition, if it crosses boundaries, will lead to serious consequences.

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