JOIN USFTX founder Sam Bankman-Fried charged with bribing Chinese officials
Federal prosecutors added a foreign bribery charge to the growing list of crimes already pending against FTX founder Sam Bankman-Fried, according to a new indictment filed in federal court in Manhattan on Tuesday.
Federal prosecutors said that in 2021, Bankman-Fried instructed those working for him to pay a bribe of $40 million to one or more Chinese officials to help unfreeze trading accounts maintained by Alameda Research, FTX’s sister company, that held about $1 billion in cryptocurrencies.
The bribe money was paid to the Chinese officials in cryptocurrency, the document said. The indictment said the effort to pay off the unnamed Chinese officials was successful in getting the trading accounts unfrozen.
The bribery charge was brought under the Foreign Corrupt Business Practices Act, a federal law used by authorities to go after big corporations for paying bribes to operate in other countries.
Federal prosecutors have now charged Bankman-Fried with 13 criminal counts, including securities fraud, money laundering and violating campaign finance laws. The mounting charges against Bankman-Fried, 31, not only add years to the potential prison time he faces if convicted but also could put more pressure on him to take a guilty plea.
A spokesperson for Bankman-Fried did not have an immediate comment on the newest charge. Bankman-Fried was freed after posting bail but is confined to his parents’ home in Palo Alto, California.
Federal prosecutors in Manhattan filed the first set of criminal charges against Bankman-Fried in December, a month after the big cryptocurrency exchange collapsed into bankruptcy. The top charge facing Bankman-Fried is that he misappropriated billions of dollars in customer deposits for his own personal use and to make up for hefty losses incurred by Alameda.
The indictment filed by prosecutors said the bribe money was paid to unfreeze trading accounts maintained by Alameda.
Authorities said that in early 2021, Chinese officials froze the money in those accounts, which were held in two of China’s largest cryptocurrency exchanges. The accounts had been frozen in connection with an investigation into one of Alameda’s trading partners.
Bankman-Fried came up with the plan to pay bribes, prosecutors said, after other efforts to unfreeze the money were unsuccessful, including hiring lawyers to lobby Chinese officials and creating fraudulent accounts in an attempt to deceive Chinese authorities.