Last Updated on March 29, 2023 by Bitfinsider
In a newly revised indictment that was unveiled on Tuesday, FTX founder Sam Bankman-Fried was charged with paying $40 million in bribes to one or more Chinese officials in order to have assets connected to his cryptocurrency company unfrozen.
After being detained in the Bahamas in December and brought to the US shortly after, Bankman-Fried now faces a total of 13 charges, including one for conspiring to break the Foreign Corrupt Practices Act’s anti-bribery provisions. On Monday, the charge was returned.
A fifth arrest was about to be made in what U.S. Attorney Damian Williams has repeatedly characterized as a continuing investigation, according to language in the charge. The indictment claims that this unnamed person collaborated on the bribery scheme with Bankman-Fried and “will be arrested in the Southern District of New York.”
When FTX ran out of money following the global cryptocurrency exchange’s version of a bank run, it filed for bankruptcy on November 11. A $250 million personal recognizance loan that permits him to reside in Palo Alto, California, with his parents has allowed him to remain free.
He has entered a not guilty plea to accusations that he defrauded investors of billions of dollars prior to the failure of his company. The Associated Press was informed on Tuesday that Bankman-Fried’s attorneys had no further comment.
U.S. District Judge Lewis A. Kaplan scheduled an arraignment for Thursday based on the revised charge. Additionally, he forbade Bankman-Fried on Tuesday from getting in touch with any current or former workers of FTX or Alameda Research, the company’s affiliated cryptocurrency hedge fund trading business. The order also forbids Bankman-Fried from using any other cellphones, computers, or “smart” gadgets that have internet access as well as restricts him to using only one laptop and phone.
The claimed bribes came from the way Alameda Research was run. According to the indictment, two of China’s major cryptocurrency exchanges had about $1 billion in cryptocurrency in certain Alameda cryptocurrency trading accounts that Chinese law enforcement officials had frozen in early 2021.
According to the indictment, Bankman-Fried, 31, was aware that the accounts had been frozen by Chinese officials as part of an ongoing investigation into a specific trading counterparty in Alameda.
The indictment stated that Bankman-Fried eventually agreed to direct a multimillion dollar bribe to try to unfreeze the accounts after numerous efforts over several months, including using lawyers to lobby, to no avail.
In an attempt to evade freeze orders and transfer cryptocurrency from frozen accounts to the fraudulent accounts, the indictment claims that Bankman-Fried and those under his direction opened new fraudulent accounts on Chinese exchanges using the personal information of several people who were not connected to FTX or Alameda.
In November 2021, a part of the $40 million cryptocurrency bribe payment was transferred from Alameda’s primary trading account to a personal cryptocurrency wallet, and the frozen accounts were unfrozen around the same time, according to the indictment.
According to the indictment, Bankman-Fried authorized the transfer of extra tens of millions of dollars in cryptocurrency to complete the bribe after being informed that the accounts had been unfrozen.
Former Alameda CEO Carolyn Ellison is one of those already accused in the case. She, along with two former FTX executives who entered into cooperation agreements with the government and pleaded guilty, have consented to testify against Bankman-Fried.
Hardware wallets are safe and secure devices that can be used offline. They keep your cryptocurrency offline, making it impossible for you to be hacked. To find out more on the leading hardware wallets, you may view our reviews here: Ledger & Trezor
Disclaimer: The views and opinions expressed by the author, or any people mentioned in this article, are for informational purposes only, and they do not constitute financial, investment, legal, tax or other advice. Investing in or trading cryptocurrency or stocks comes with a risk of financial loss.