Sam Bankman-Fried Charged With Bribing Chinese Government Officials

Former CEO and founder of FTX Sam Bankman-Fried has been hit with an additional bribery charge, according to a superseding indictment unsealed Tuesday.

A superseding indictment includes additional charges filed against a defendant after the original indictment. In this case, a federal grand jury charged Bankman-Fried with eight counts of conspiracy, wire fraud on customers and lenders, commodities and securities fraud, money laundering, and campaign finance violations in December.

It was filed under seal on December 9 and unsealed on December 13.

The latest filing no includes a bribery charge that alleges that Bankman-Fried directed $40 million in cryptocurrencies to “one or more Chinese government officials in order to influence” them to unfreeze accounts owned by FTX’s sister trading firm Alameda Research.

U.S. prosecutors allege that in early 2021, Bankman-Fried bribed Chinese government officials to unfreeze $1 billion worth of assets in Alameda Research trading accounts on “two of China’s largest cryptocurrency exchanges.” The court filing says the funds were frozen as part of an investigation into “a particular Alameda trading counterparty,” but doesn’t name the exchanges or the firm that was being investigated.

Before turning to bribery, Bankman-Fried spent months trying to access the funds, writes U.S. Attorney for the Southern District of New York Damian Williams. He hired attorneys to lobby the government, asked the exchanges to unfreeze the funds, and opened new trading accounts under false names.

It didn’t work. By November 2021, Bankman-Fried “caused a bribery payment of cryptocurrency worth approximately $40 million to be transferred from Alameda’s main trading account to a private cryptocurrency wallet,” according to the court documents.

Around the same time, Alameda’s crypto exchange accounts were unfrozen and the trading firm sent tens of millions more worth of crypto assets “to complete the bribe.”

Bankman-Fried’s charges

Previous charges against the disgraced FTX founder include wire fraud, securities fraud, conspiracy to commit bank fraud, and defrauding the Federal Election Commission.

On the charges related to the FEC, prosecutors allege that Bankman-Fried and others “would and did defraud the United States, and an agency thereof, by impairing, obstructing, and defeating the lawful functions of a department and agency of the United States through deceitful and dishonest means.”

The charge relates specifically to allegedly deceiving the FEC’s ability to “administer federal law concerning source and amount restrictions in federal elections, including the prohibitions applicable to corporate contributions and conduit contributions,” according to the indictment.

Today’s superseding indictment comes just a month after prosecutors hit Bankman-Fried with four additional charges following the former CEO’s arrest in December last year.

Bankman-Fried now faces a total of 13 criminal charges in connection with the dramatic collapse of the once-dominant FTX cryptocurrency exchange.

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Written by Liam J. Kelly on 2023-03-28 14:28:05.

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