FTX cryptocurrency exchange founder and former CEO Sam Bankman-Fried (“SBF”) is facing a new 13-count indictment from U.S. authorities.
One of the new SBF charges includes an alleged $40 million bribe to a Chinese government official in a new superseded indictment, according to a court filing by U.S. Attorney Damian Williams. In Section 105 of the filing, the complaint alleges that SBF and other related parties "directed and caused the transfer of at least approximately $40 million in cryptocurrency for the benefit of one or more Chinese government officials." The transaction was to influence and induce Chinese officials to unfreeze the cryptocurrency accounts of FTX affiliate Alameda Research. The accounts reportedly hold more than $1 billion worth of cryptocurrencies.
According to the filing, Chinese law enforcement froze certain Alameda accounts of “two of China’s largest cryptocurrency exchanges” in or around early 2021. The FTX founder knew about the freeze and tried multiple methods to unfreeze the accounts, including attempting to transfer cryptocurrency to fraudulent accounts to circumvent China’s freezing order. "After months of unsuccessful attempts to unfreeze the accounts, Samuel Bankman-Fried discussed with others and ultimately agreed to and directed millions of dollars in bribes in order to seek unfreeze of the accounts," the court documents state. After the accounts were unfrozen at the direction of the SBF, the U.S. government found that Alameda used the unfrozen cryptocurrency to fund additional trading activity by Alameda.
Since China officially banned cryptocurrency exchanges from providing services in the country back in 2017, it seems unclear what Chinese cryptocurrency exchange Alameda was using in early 2021. As previously reported, China will ban cryptocurrencies across the board in September 2021.
FTX founder Bankman-Fried faces trial scheduled for October 2, 2023, on charges of stealing billions of dollars in FTX client funds through Alameda Research. He was also accused of making a large number of illegal political donations. He has pleaded not guilty to eight criminal charges, which could see him jailed for up to 115 years if convicted.
