FTX Founder Sam Bankman-Fried paid 10s of millions of dollars in bribes to at least one Chinese government official, the Justice Department charged in a new indictment of the disgraced crypto CEO.
The federal government claims that after bank accounts held by Bankman-Fried’s hedge fund, Alameda Research, were frozen by Chinese police around November 2021, he and others “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 the accounts, CNBC reported.
The indictment also charges that Bankman-Fried and his associates tried “numerous methods” to get the Chinese to unfreeze the accounts, which contained about $1 billion worth of cryptocurrency, CNBC said. After failing those attempts, prosecutors said they turned to a bribery scheme.
Alameda used the money to continue to fund its loss-generating trades, perpetuating the fraud upon customers and investors for another year, until the cryptocurrency exchange he founded, FTX, and Alameda collapsed in November after investors pulled their money out of the crypto exchange.
The new count, which falls under the Foreign Corrupt Practices Act, brings to 13 the number of federal charges Bankman-Fried faces. The 31-year-old has pleaded not guilty to the first 12 charges, and is scheduled to be arraigned on the new count Thursday. He already faced up to 115 years in prisonthe on earlier charges.
A spokesman for the U.S. attorney’s office for the Southern District of New York, which is prosecuting the case, declined to comment. The Department of Justice did not immediately respond to a request for more information.
Bankman-Fried stepped down on Nov. 11and the company filed for Chapter 11 bankruptcy protection. The disgraced CEO claims his $20 billion fortune was wiped out. He is awaiting trial, out on $20 million bail.
The first charges against the former crypto mogul were brought in December, accusing him of stealing billion of dollars of FTX customers’ money, along with misleading investors and banks that backed FTX.
The new charge follows efforts on Monday by prosecutors to tighten the bail restrictions on Bankman-Fried, The Wall Street Journal reported. U.S. District Judge Lewis Kaplan was asked to approve a deal negotiated with his lawyers to reduce his access to electronic devices and the Internet in a move to prevent him from contacting former FTX employees.
The new rules would allow Bankman-Fried to have a new phone with no internet capability and a basic laptop with limited functions, but he would be forbidden from using other electronic communication devices, Reuters reported.
The laptop would have monitoring software to track how it is used. He would be allowed to use the phone to make calls and send text messages but other messaging apps are banned.