Federal Indictment: FTX Co-Founder Sam Bankman-Fried Accused Of Bribery
In a shocking turn of events, FTX co-founder Sam Bankman-Fried has been accused of paying out tens of millions of dollars worth of bribes to at least one Chinese government official, according to a new indictment filed by federal prosecutors on Tuesday. The indictment alleges that Bankman-Fried and his associates “directed and caused the transfer” of at least $40 million in cryptocurrency “intended for the benefit of one or more Chinese government officials in order to influence and induce them” to unfreeze some of Alameda Research’s accounts.
A reporter asked the Chinese Ministry of Foreign Affairs about SBF's bribery of Chinese officials. A spokeswoman for China's foreign ministry said she was not aware of the incident. https://t.co/31SdR8XdKE
— Wu Blockchain (@WuBlockchain) March 29, 2023
Multimillion-Dollar Bribe
The freezing order was issued by Chinese police “in or around” November 2021, and the accounts contained approximately $1 billion worth of cryptocurrency. Bankman-Fried and his associates allegedly tried “numerous methods” to unfreeze the accounts, both legally and personally, but ultimately resorted to a multimillion-dollar bribe to have the frozen accounts unlocked.
Bankman-Fried’s hedge fund, Alameda Research, used the unfrozen assets to continue funding loss-generating trades, continuing on what the government alleges was a fraud upon customers and investors for another year. FTX and Alameda Research both collapsed in November 2022 after concerns about their balance sheet turned into a bank run.
Indicted on Federal Charges
Bankman-Fried now faces a federal indictment and civil charges from both the Securities and Exchange Commission and the Commodity Futures Trading Commission. These charges indicate that new evidence has been obtained by the federal government about Bankman-Fried’s international dealings. The indictment comes one day after U.S. regulators accused crypto exchange Binance of facilitating terrorist financing and violating U.S. derivatives law.
The charges against Bankman-Fried also suggest that the federal government has obtained new evidence about his international dealings. Bankman-Fried’s FTX and Alameda Research collapsed in November 2022 after concerns about their balance sheet triggered a bank run. The collapsed FTX is now mired in Delaware bankruptcy court proceedings. The indictment against Bankman-Fried is the latest blow to the cryptocurrency industry, which has faced increased scrutiny from regulators in recent months as it becomes more mainstream.
