According to a fresh indictment that was submitted to the federal court in Manhattan on Tuesday, federal prosecutors have added a charge of international bribery to the list of offences that were previously pending against the founder of the FTX, Sam Bankman-Fried.
Federal prosecutors asserted that in 2021, Mr. Bankman-Fried instructed those working for him to pay a bribe to one or more Chinese officials in the amount of $40 million in order to assist in unfreezing trading accounts maintained by Alameda Research, which is FTX’s sister company and which held approximately $1 billion in cryptocurrency.
According to the paper, the bribe was paid in bitcoin to the Chinese authorities who remained nameless, and it was successful in resulting in the trading accounts being unfrozen.
The bribery allegation was made under the Foreign Corrupt Business Practices Act, which is a federal legislation that is utilised by the authorities to go after large firms that pay bribes to operate in other countries. This law was used to bring about the bribery charge.
Federal prosecutors have now accused Mr. Bankman-Fried with a total of 13 felony offences, some of which include crimes including campaign finance violations, money laundering, and securities fraud. The accumulation of charges not only increases the number of years that he may spend in jail if he is found guilty, but it also puts him under further pressure to make a guilty plea.
On the most recent accusation, a spokeswoman for Mr. Bankman-Fried did not have any quick reaction to provide the press. Mr. Bankman-Fried, age 31, was released from custody after posting bond; however, he is not permitted to leave the residence he shares with his parents in Palo Alto, California.
In the month of December, one month after FTX was forced to declare bankruptcy due to its collapse, federal prosecutors in Manhattan brought the first set of criminal accusations against Mr. Bankman-Fried. The most serious accusation is that he stole billions of dollars in of deposits from customers and used them for his own personal gain as well as to compensate Alameda for substantial financial losses.
The authorities said that the money in the Alameda accounts, which were stored in two of China’s top cryptocurrency exchanges, was frozen somewhere in the early part of 2021 by Chinese government officials. In line with an inquiry into one of Alameda’s business partners, the accounts had been put on hold before the investigation began.
Prosecutors claim that Mr. Bankman-Fried devised the scheme to pay bribes after other attempts to unfreeze the money, such as employing lawyers to lobby Chinese officials and creating fraudulent accounts in an effort to mislead the Chinese authorities, were unsuccessful. Other efforts included hiring lawyers to lobby Chinese officials and creating fraudulent accounts in an attempt to deceive the Chinese authorities.
According to the statements made by the federal prosecutors, the bribe was paid in at least two installments, the first of which took place in November of 2021.
The remaining portion of the payment was allegedly paid after Mr. Bankman-Fried had received confirmation that the accounts had been unfrozen, as stated in the indictment. Once the funds were unfrozen, they were put to use in order to fuel increased trading at Alameda.
In the charge complaint, neither the Chinese authorities nor the workers who helped Mr. Bankman-Fried pay the bribe are identified in any way. Yet, it was said that at least one of Alameda’s workers was located in the United States.
Alameda, which Mr. Bankman-Fried co-founded in 2017, had its beginnings in Berkeley, California; nevertheless, it quickly relocated to Hong Kong and continued to do business from that location until the collapse of FTX in November.
According to the authorities, Mr. Bankman-Fried and his senior lieutenants hid some elements of the intimate connection that existed between Alameda and FTX from consumers, investors, and lenders. In particular, they did not reveal that Alameda was using the money of its customers at will in order to execute trades and cover any losses that it experienced.
Three former executives who worked closely with Mr. Bankman-Fried have pled guilty and are collaborating with the authorities. These former executives were all fired from their positions. One of them is Caroline Ellison, who was a prominent figure in the Alameda community.