Sam Bankman-Fried, the disgraced co-founder of cryptocurrency exchange FTX, bribed Chinese government officials with $40 million in cryptocurrency, the Department of Justice alleged in a new 13-count indictment (pdf).
Federal prosecutors stated that accounts belonging to Bankman-Fried and others “directed and caused the transfer” of at least $40 million in crypto “intended for the benefit of one or more Chinese government officials in order to influence and induce them” to unfreeze some of the accounts.
In November 2021, accounts for Alameda Research, Bankman-Fried’s hedge fund, were frozen by Chinese authorities.
The Chinese government has been cracking down on cryptocurrency since 2017, banning digital currencies in September 2021.
Bankman-Fried and his colleagues employed “numerous” legal and personal methods to unfreeze the accounts that contained approximately $1 billion worth of crypto, according to prosecutors.
“After months of failed attempts to unfreeze the accounts, Samuel Bankman-Fried discussed with others and ultimately agreed to and directed a multimillion-dollar bribe to seek to unfreeze the accounts,” prosecutors wrote in the indictment.
Once the funds were released, the money was utilized to fund his hedge fund’s loss-generating trades.
Bankman-Fried is accused of violating the Foreign Corrupt Practices Act, an anti-bribery statute.
A letter to the federal district court judge managing the case confirmed that a grand jury returned the indictment on March 27.
“The S5 Indictment, which was unsealed this morning, includes the twelve counts contained in the S3 Superseding Indictment, as well an additional count for conspiracy to violate the anti-bribery provisions of the Foreign Corrupt Practices Act (‘FCPA’), in violation of 18 U.S.C. § 371,” the letter stated.
This is in addition to the plethora of other allegations, including fraud, campaign finance violations, and money laundering.
In February, the Justice Department accused Bankman-Fried of directing approximately $100 million in political contributions to Democratic and Republican congressional candidates through straw donors or dark money groups.
By Andrew Moran
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