MiraclePlus Denies Zhisuan Investment After U.S. Sanctions

MiraclePlus denied investing in Shanghai Zhisuan Technology after the U.S. sanctioned the Chinese artificial-intelligence startup and four related entities, disputing a funding arrangement described in trial testimony.

An Oct. 20 statement from MiraclePlus said the firm had not invested in Zhisuan and was communicating with relevant parties in an effort to have the sanctions lifted. MiraclePlus is also known as Qiji Chuangtan Beijing Investment Management Co. Ltd.

Trial testimony tied former Google engineer Linwei Ding’s participation in the MiraclePlus program to a financing arrangement involving 5 million yuan (about $700,000) in private funding from the firm’s venture arm for a 7% interest in Zhisuan. No transfer date is given, and whether the funds were transferred or the stake issued remains unestablished.

A superseding indictment separately alleges that Ding signed a Nov. 20, 2023, agreement granting a MiraclePlus-affiliated company a 7% ownership interest in exchange for investment capital.

The U.S. Department of State designated five entities under the Protecting American Intellectual Property Act (PAIPA) on Oct. 19, issuing sanctions against MiraclePlus and four related entities. The department alleged that Zhisuan knowingly engaged in or benefited from significant theft of U.S. persons’ trade secrets occurring on or after Jan. 5, 2023, and that MiraclePlus provided significant financial, material or technological support for the theft. The Treasury Department’s Office of Foreign Assets Control (OFAC) added all five entities to its Non-SDN Menu-Based Sanctions List.

The other designees are Beijing Qiji Chuangtan Phase I Venture Capital Center Limited Partnership, Beijing Qiji Chuangtan Phase II Venture Capital Center Limited Partnership and Beijing Qiji Chuangtan Zhiyuan Enterprise Management Center Limited Partnership. The designations are administrative actions, not criminal convictions of the companies.

The measures block property under U.S. jurisdiction, prohibit certain foreign-exchange and financial transactions subject to U.S. jurisdiction, and bar U.S. persons from significant investments in the entities’ equity or debt. U.S. financial institutions are barred from loans or credits totaling more than $10 million to an entity during any 12-month period, subject to a statutory exception. Certain transactions needed to wind down dealings with MiraclePlus and related entities are authorized through 12:01 a.m. ET (5:01 a.m. UTC) Jan. 19, 2027.

A federal jury convicted Ding on seven counts of trade-secret theft and seven counts of economic espionage on Jan. 29. On Aug. 20, Chhabria granted judgment of acquittal on the seven economic-espionage counts, finding insufficient evidence that Ding intended or knew his conduct would benefit the Chinese government. The trade-secret-theft convictions remained.