FTX founder Sam Bankman-Fried charged with bribing Chinese officials $40M to access frozen crypto funds
Embattled crypto entrepreneur Sam Bankman-Fried was hit with a new criminal charge Tuesday by federal prosecutors alleging he bribed Chinese officials with tens of millions of dollars in digital currency to unfreeze his accounts.
The charge unsealed in Manhattan Federal Court added to a laundry list of criminal allegations against Bankman-Fried for which he potentially faces up to 185 years behind bars.
The feds have already accused him of misappropriating billions in stolen customer funds, in what they’ve described as one of the largest financial frauds in history, and pumping millions into the U.S. political system through concealed donations to purchase influence over cryptocurrency legislation in Washington.
The feds now say that from January 2021 through February 2022, the alleged mini-Madoff — commonly referred to by his initials “SBF” — also sought to pay off Chinese officials $40 million in cryptocurrency so they would unfreeze trading accounts associated with his crypto hedge fund Alameda Research.
After failed attempts to move his money and access his bulging coffers through various lobbying efforts, Bankman-Fried succeeded in November 2021 after transferring the bribe from Alameda’s account to a private cryptocurrency wallet, according to federal authorities.
“The purpose of the bribe was to influence and induce one or more Chinese government officials to unfreeze certain Alameda trading accounts containing over $1 billion in cryptocurrency, which had been frozen by Chinese authorities,” reads the charging papers.
At least one unnamed co-conspirator accused of aiding Bankman-Fried in the bribe is slated to face charges in Manhattan, according to court filings. A federal law enforcement source said they have not previously been mentioned in the case. Three of Bankman-Fried’s former closest associates have already pleaded guilty and are cooperating against him.
He’s slated to appear in court Thursday to enter a plea to the new charge of conspiring to violate the Foreign Corrupt Practices Act and other charges filed in February.
Bankman-Fried has been under house arrest at his parents’ Palo Alto, Calif., home on a $250 million bond since first facing charges in December. His bail represents the largest federal pretrial bond package in history.
The one-time wunderkind has rubbed the judge presiding over his case the wrong way more than once, leading Judge Lewis Kaplan to issue a thinly-veiled threat to imprison him after learning he’d remotely accessed his TV setup in the Bahamas. Bankman-Fried had been warned in the days previously not to use encrypted technology.
Prosecutors have proposed new bail restrictions but have not sought his detention pretrial. The 31-year-old’s trial is slated for October.
Bankman-Fried was arrested in December at his Bahamas home and extradited to the U.S. amid allegations he defrauded people who entrusted him with billions in savings by rerouting their money from his trading platform to his crypto hedge fund and various other places.
He’s pleaded not guilty to criminal wire fraud charges in the multi-billion fraud case and also faces charges by the Securities and Exchange Commission and the Commodities Futures Trading Commission.
People who traded their money on FTX trusted Bankman-Fried and then found themselves “overnight unable to withdraw their funds and unsure about whether they would ever be repaid,” according to the indictment.
The four new charges brought against Bankman-Fried on Feb. 23 accuse him of donating more than 300 times to leading federal political candidates between fall 2021 and November 2022, masking the donations to evade contribution limits. According to the indictment, the tally of his public and private donations made Bankman-Fried far and away one of the biggest political donors of the 2022 midterm elections.
At one point speculated to be the world’s first trillionaire, Bankman-Fried’s stunning downfall came upon the leaking of FTX’s balance sheets late last year, revealing an $8 billion hole in its accounts.
Once valued at $30 billion, FTX filed for Chapter 11 bankruptcy protection in November and has since seen upwards of $700 million confiscated in Bankman-Fried’s case. The feds say his fraud potentially impacted 1 million people.
A spokesman for Bankman-Fried declined to comment.