US sanctions MiraclePlus and Shanghai Zhisuan under PAIPA
On October 19 the US sanctioned MiraclePlus, Shanghai Zhisuan and three linked partnerships under PAIPA. Funds and co-investors should check counterparties now.
On October 19, 2026, the US Treasury’s Office of Foreign Assets Control (OFAC) and the State Department placed five China-based entities on a sanctions list under the Protecting American Intellectual Property Act of 2022 (PAIPA). The list includes Shanghai Zhisuan Technology and MiraclePlus, the Beijing firm registered as Qiji Chuangtan Beijing Investment Management, plus three partnerships linked to it. The State Department says all five are connected to Linwei Ding, a former Google engineer convicted of stealing confidential AI technology.
Key points
- Each entity is subject to five measures: blocking of its property (goods imports excepted), a ban on US bank lending above $10 million in any 12-month period, limits on foreign-exchange and bank transfers under US jurisdiction, and a ban on US investment in significant equity or debt.
- Ding’s sentencing is over. A judge overturned his economic espionage convictions in August, and on September 1 he received 12 months minus one day. The sanctions came after those rulings.
- Funds, co-investors and lenders with ties to these entities should check counterparties by Unified Social Credit Code (USCC), not by translated names.
Background
Y Combinator opened a China unit in 2018, led by Qi Lu, a former Microsoft and Baidu executive. According to Startup Fortune, YC shut that unit in November 2019 as the US–China trade war made the arrangement untenable. Lu then spun the team out as MiraclePlus, which the article says “never stopped doing what YC China was built to do”: funding and mentoring Chinese startups.
Ding joined Google as a software engineer in 2019. The Justice Department says he stole “more than two thousand pages of confidential information” between about May 2022 and April 2023. A San Francisco federal jury convicted him on January 29, 2026, on seven counts of economic espionage and seven counts of theft of trade secrets. In August, Judge Vince Chhabria overturned the espionage convictions, finding insufficient evidence that Ding intended or knew his conduct would benefit the Chinese government. The theft convictions stand. On September 1 the judge sentenced Ding to 12 months minus one day, two years of supervised release, more than $198,000 in restitution to Google and a $2,500 fine.
In the material we read, PAIPA had been used only once before. On February 24, 2026, the government sanctioned Matrix LLC, also known as Operation Zero, a Russian cyber-tools broker, and Sergey Zelenyuk, described as its alleged owner and director. Foley & Lardner’s analysis calls the statute “a new mechanism” against trade-secret theft, particularly useful when foreign actors sit beyond the practical reach of US courts. The same day, a former defense contractor employee received 87 months for selling trade secrets to Operation Zero.
The facts
OFAC published its notice on October 19 under the title “Protecting American Intellectual Property Act of 2022 (PAIPA) Designations; Issuance of Associated General Licenses,” listing the entities under PAIPA Section 2. The State Department statement, issued by spokesman Thomas “Tommy” Pigott, describes “five entities connected to” Ding, cites 50 U.S.C. 1709, and names none of them.
| OFAC name | Registered Chinese name | Formed | USCC |
|---|---|---|---|
| BEIJING QIJI CHUANGTAN PHASE I VENTURE CAPITAL CENTER LIMITED PARTNERSHIP (a.k.a. MIRACLE PLUS RMB FUND I) | 北京奇绩创坛一期创业投资中心 有限合伙 | June 2020 | 91110108MA01QB5K5M |
| BEIJING QIJI CHUANGTAN PHASE II VENTURE CAPITAL CENTER LIMITED PARTNERSHIP (a.k.a. MIRACLE PLUS RMB FUND II) | 北京奇绩创坛二期创业投资中心 有限合伙 | October 2022 | 91110108MABQAUYK7G |
| BEIJING QIJI CHUANGTAN ZHIYUAN ENTERPRISE MANAGEMENT CENTER LIMITED PARTNERSHIP | 北京奇绩创坛致远企业管理中心 有限合伙 | November 8, 2019 | 91110108MA01NK6F9X |
| QIJI CHUANGTAN BEIJING INVESTMENT MANAGEMENT CO LTD (a.k.a. MIRACLEPLUS) | 奇绩创坛 北京 投资管理有限责任公司 | March 6, 2019 | 91110108MA01HHAHXF |
| SHANGHAI ZHISUAN TECHNOLOGY CO LTD | 上海至算科技有限公司 | October 17, 2023 | 91310104MAD3LXU92B |
The first four share one Beijing address, No. 601, 6th Floor, No. 28 Chengfu Road, Haidian District. Shanghai Zhisuan is registered in Xuhui District.
Foley reads PAIPA as requiring at least five measures from a menu of twelve. OFAC applied these five to each entity:
- Blocking: all property and interests in property are blocked, and transactions with the entity are prohibited, except importing goods.
- Loans: US financial institutions may not make loans or provide credit totaling more than $10 million in any 12-month period.
- Foreign exchange: foreign-exchange transactions under US jurisdiction that involve the entity’s interest are prohibited.
- Banking: credit transfers and payments between financial institutions, under US jurisdiction and involving the entity, are prohibited.
- Investment: US persons may not invest in or buy significant amounts of the entity’s equity or debt.
All five appear on Foley’s list of twelve. OFAC also issued two general licenses. GL 1 authorizes transactions under the Cyber-Related Sanctions Regulations. GL 2 authorizes the wind-down of transactions involving certain entities blocked on October 19, 2026. We read only the titles, so we cannot describe their scope or expiry dates.
What others say
The State Department calls the theft “a serious threat” to US economic, foreign-policy and national-security interests.
ICLG’s Rob Harkavy frames the action as a way to restrict the financing and international business of companies linked to IP theft, without first having to secure criminal convictions against them. ICLG and Startup Fortune both say Ding founded Shanghai Zhisuan, but OFAC’s listing names no founder, so that claim rests on those two outlets.
Startup Fortune reports that MiraclePlus provided Shanghai Zhisuan’s seed money in exchange for an ownership stake. Its description of the last entity on the list is muddled, so we rely on OFAC for the list. Foley notes that the “significant threat” test is broad and leaves the government substantial discretion.
The volume figures disagree. The Justice Department’s verdict release says “more than two thousand pages,” and ICLG repeats that number. Startup Fortune’s body text says more than 1,000 files. Sentencing coverage reports 1,255 internal documents, about 14,000 pages, and the State statement says “thousands of pages.” We treat the Justice Department’s figure as the primary baseline. We could not check the sentencing figures against a court filing or a Justice Department sentencing release.
Our take
The notable step is where the sanctions land: on the money behind the theft, not only on the thief. PAIPA reaches foreign persons who knowingly engage in, or benefit from, significant trade-secret theft. For funds, that changes due diligence. A limited partner or co-investor now has to ask whether a partner sits downstream of a sanctioned entity.
Three points matter now. Match counterparties by USCC, not by translated names. OFAC registers the Shanghai company as 上海至算科技有限公司, and the code is the reliable key. If a counterparty is listed, have counsel read GL 2 before winding anything down. And the restrictions bite on US jurisdiction: US persons cannot buy significant equity or debt, and US banks cannot exceed the $10 million cap. A deal with no US bank, no US investor and no transaction under US jurisdiction faces a narrower direct constraint. We still expect US banks and US LPs to screen the names.
Several things remain unknown. The material we read contains no response from MiraclePlus or Shanghai Zhisuan. We did not read the text of GL 1 or GL 2. The page count is disputed, and we have no information on whether more entities will be listed.
The same day, a DHS notice disclosed a July 24 order barring federal civilian agencies from buying DeepSeek products (DHS’s DeepSeek federal ban). On October 16, China’s commerce ministry opened comment on a draft that would add 23 AI technologies to its export catalogue (China’s draft AI export catalogue). Washington is limiting federal purchases from one Chinese AI company, Beijing is proposing tighter AI export controls, and this action targets money and transactions.