- FTX co-founder Sam Bankman-Fried paid tens of millions of dollars in bribes to at least one Chinese government official, federal prosecutors claimed in a new indictment Tuesday.
- The federal government claims that accounts held by Bankman-Fried’s hedge fund Alameda Research “in or around” November 2021 were the target of a Chinese police freezing order.
- The indictment also alleges that Bankman-Fried and others “directed and arranged for” the transfer of at least $40 million in cryptocurrency “intended for the benefit of one or more Chinese government officials in order to influence and arrange for them,” some said to release these accounts .
Former FTX CEO Sam Bankman-Fried, charged with fraud over the collapse of the bankrupt cryptocurrency exchange, arrives on January 3, 2023 for the day of a hearing in Manhattan Federal Court in New York City.
David Dee Delgado | Portal
FTX co-founder Sam Bankman-Fried paid tens of millions of dollars in bribes to at least one Chinese government official, federal prosecutors claimed in a new indictment Tuesday.
The federal government alleges that accounts of Bankman-Fried’s hedge fund Alameda Research “in or about” November 2021 were the target of a Chinese police freezing order for the transfer” of at least $40 million in cryptocurrency “in favor of one or more Chinese government officials intended to influence and induce them” to declassify some of these accounts.
Bankman-Fried and his associates considered and tried “numerous methods” to release the accounts, which contained around $1 billion worth of cryptocurrencies, according to prosecutors. Ultimately, after both legal and personal efforts failed, Bankman-Fried agreed and ordered a multimillion-dollar bribe to release the frozen accounts, prosecutors allege.
Bankman-Fried’s hedge fund used the unfrozen assets to continue funding Alameda’s loss-making operations, continuing what the government described as cheating customers and investors for another year. FTX and Alameda imploded in November 2022 after concerns about their balance sheets turned into an outright bank run. Bankman-Fried now faces federal charges and civil charges from both the Securities and Exchange Commission and the Commodity Futures Trading Commission.
The indictments suggest the federal government has obtained fresh evidence about Bankman-Fried’s international operations, and they come a day after US regulators slammed crypto exchange Binance with allegations of terrorist financing facilitation and violations of US derivatives law have.
Meanwhile, the collapsed Bankman-Fried FTX remains mired in a Delaware bankruptcy filing.
CNBC reached out to a spokesman for Bankman-Fried, but didn’t immediately hear a response.