Federal prosecutors in the case against Sam Bankman-Fried now say that on top of earlier charges, the former FTX CEO also successfully bribed “one or more” Chinese officials with at least $40 million of crypto so that he could regain access to trading accounts that Chinese authorities had frozen just months earlier.
According to a new indictment unsealed by the Southern District Court of New York on Tuesday, the story begins in early 2021, when Chinese authorities froze some of the trading accounts of Bankman-Fried’s Alameda Research, the trading firm closely tied to his fallen crypto empire FTX. The trading accounts, which collectively had about $1 billion worth of crypto in them, had been frozen as part of a broader investigation into an unnamed Alameda trading partner, or counterparty.
Following the freeze, Bankman-Fried and “others operating at his direction” allegedly attempted (and failed) to unfreeze the accounts by a variety of means for months, including by hiring lawyers to lobby on their behalf, and, much more hilariously, attempting to transfer the money elsewhere without authorities noticing, by opening accounts using the personal information of people not affiliated with FTX or Alameda.
Presumably frustrated, Bankman-Fried started to talk about sending someone in China a “multi-million-dollar” crypto bribe to solve the problem FTX found itself in. Eventually, an Alameda employee sent instructions for how to bribe the Chinese government at Bankman-Fried’s “direction,” per the indictment, and in November 2021, Alameda sent a “bribe payment” of $40 million to a private crypto wallet.
Around that time, allegedly, Alameda regained access to the accounts. Then, Bankman-Fried “authorized the transfer of additional tens of millions of dollars in cryptocurrency to complete the bribe.”
At the time, this was presumably news for Bankman-Fried. The company had its crypto back and began to trade with it again soon enough. The downside for Bankman-Fried is that he has now been charged with a conspiracy to violate the anti-bribery provisions of the Foreign Corrupt Practices Act, just one of 13 criminal charges against him. He has pleaded not guilty to everything thus far.
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