FTX founder Bankman-Fried charged over alleged bribes to Chinese officials

FTX founder Bankman-Fried charged over alleged bribes to Chinese officials
Sam Bankman-Fried is accused of bribing Chinese officials (AP Photo/John Minchillo, File)

FTX founder Sam Bankman-Fried was charged with directing 40 million US dollars (£32 million) in bribes to one or more Chinese officials to unfreeze assets relating to his cryptocurrency business in a newly rewritten indictment unsealed on Tuesday.

The charge of conspiracy to violate the anti-bribery provisions of the Foreign Corrupt Practices Act raises to 13 the number of charges Bankman-Fried faces after he was arrested in the Bahamas in December and brought to the United States soon afterward.

FTX filed for bankruptcy on November 11, when it ran out of money after the cryptocurrency equivalent of a bank run.

He has remained free on a 250 million US dollar (£202 million) personal recognizance bond that lets him stay with his parents in Palo Alto, California.

1,000,000,000 The value of the assets in US dollars unfrozen following the alleged payment of a bribe by Sam Bankman-Fried

He has pleaded not guilty to charges that he cheated investors out of billions of dollars before his business collapsed.

The alleged bribes stemmed from the operation of Alameda Research, which is affiliated with FTX, Bankman-Fried’s global cryptocurrency exchange.

The indictment said Chinese law enforcement authorities in early 2021 froze certain Alameda cryptocurrency trading accounts on two of China’s largest cryptocurrency exchanges.

The accounts, it said, contained about one billion US dollars (£810 million) in cryptocurrency.

Bankman-Fried understood that the accounts had been frozen by Chinese authorities as part of an ongoing probe of a particular Alameda trading counterparty, the indictment said.

After Bankman-Fried failed with several attempts to unfreeze the accounts through the use of lawyers and lobbying, he ultimately agreed to direct a multimillion dollar bribe to try to unfreeze the accounts, the indictment said.

The bribe payment of cryptocurrency was moved from Alameda’s main trading account to a private cryptocurrency wallet in November 2021 and the frozen accounts were unfrozen at about the same time, the indictment said.

Meanwhile on Tuesday, Bankman-Fried’s lawyers agreed to limit him to a laptop and a phone and block him from using any other phones, tablets, computers, video games or “smart” devices with internet access other than electronic devices owned by his lawyers that he might need to prepare for trial.

Judge Lewis A Kaplan set a Thursday hearing in the case.

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