The 17 released on bail were arrested in five cases, the National Office Against Pornographic and Illegal Publications said in a statement today.
The suspects stored a large quantity of pornographic videos and pictures on cloud storage systems developed by Internet giants Baidu and Qihoo 360 and sold access to the cloud accounts and passwords via popular social networks and messaging services, including WeChat and QQ, it said.
Xie will stand trial, state-run Xinhua news agency reported.
China has been cracking down on the internet in recent years as social media like Weibo, akin to Twitter has over 500 million subscribers who access it mostly through their mobile phones.
The mammoth growth of social media has posed a major challenge to the tightly controlled official media.
As a result the government has intensified the crackdown on the social media.
It fined Baidu more than 210,000 yuan in March for spreading obscene and pornographic novels via its apps.
Dating app MoMo was also fined 60,000 yuan in March and ordered to shut down group chats with overt sexual topic.
The arrests were made amid an official announcement that from today internet police in 50 localities, including Beijing and Shanghai as well as small, impoverished city such as Bijie will set up 24/7, the cyber police teams.
The ministry officials have deleted some 758,000 pieces of "illegal and criminous information", and have investigated and handled over 70,000 cyber crime cases since the start of this year.
