Prosecutors: Bankman-Fried bribed Chinese officials in 2021

Sam Sutton
·2 min read
6

U.S. prosecutors slapped FTX founder Sam Bankman-Fried with a new criminal charge alleging he bribed Chinese authorities with tens of millions of dollars in cryptocurrency after they froze accounts controlled by his personal hedge fund.

The superseding indictment filed Tuesday morning in New York alleges that Bankman-Fried, a one-time political megadonor who’d been a key player in Washington policy circles, ordered employees at his trading firm Alameda Research to pay $40 million to a digital wallet controlled by Chinese authorities in 2021.

The former billionaire orchestrated the alleged bribe after Alameda was locked out of its trading accounts on two of China's crypto exchanges in connection with an ongoing investigation. After the funds were unlocked following the $40 million payment, federal prosecutors allege Bankman-Fried authorized the transfer of additional “tens of millions of dollars in cryptocurrency to complete the bribe.”

With the new charge alleging conspiracy to violate the Foreign Corrupt Practices Act, Bankman-Fried now faces 13 criminal counts that include securities fraud, conspiracy to commit bank fraud and conspiracy to operate an unlicensed money transmitter. His criminal trial is scheduled to begin in October.

Bankman-Fried’s spokesperson declined comment. His legal team did not immediately respond to requests for comment.

Prior to FTX’s bankruptcy in November and his eventual arrest in the Bahamas, Bankman-Fried controlled one of the most powerful networks of crypto exchanges and trading firms in the world. He’d also cultivated an image as an honest broker among Washington policymakers and media members, dispensing hundreds of millions of dollars in political contributions, philanthropic donations and grants.

FTX’s bankruptcy and Bankman-Fried’s criminal trial derailed ongoing efforts in Congress and within federal agencies to develop a rulebook for the nascent cryptoasset industry, which has since faced a broad crackdown on practices that industry skeptics say have harmed consumers and investors.