In a newly revised indictment that was unveiled on Tuesday, FTX founder Sam Bankman-Fried was accused of giving $40 million in bribes to one or more Chinese officials in order to unlock assets connected to his cryptocurrency business.
After being detained in the Bahamas in December and transferred to the US soon after, Bankman-Fried now faces a total of 13 accusations, including one for conspiring to break the Foreign Corrupt Practices Act’s anti-bribery provisions. On Monday, the indictment was returned.
The charge also includes wording that suggests a fifth arrest in the ongoing investigation, as indicated by US Attorney Damian Williams, is about to be made. The indictment claims that this unnamed person collaborated on the bribery scheme with Bankman-Fried and “will be apprehended in the Southern District of New York.”
After FTX ran out of money following the worldwide cryptocurrency exchange’s equivalent of a bank run, it filed for bankruptcy on November 11. A $250 million personal recognisance bond that permits him to reside in Palo Alto, California, with his parents has allowed him to remain free.
He has entered a not guilty plea to charges that he defrauded investors of billions of dollars prior to the failure of his company.
The Associated Press was informed on Tuesday that Bankman-attorneys Fried’s had no further comment.
Judge Lewis A. Kaplan of the US District Court has scheduled an arraignment on the revised indictment for Thursday. Also, he forbade Bankman-Fried on Tuesday from getting in touch with any current or former workers of FTX or Alameda Research, the company’s linked cryptocurrency hedge fund trading firm. The order further forbids Bankman-Fried from using any other cellphones, laptops, or “smart” gadgets that have internet access as well as restricts him to using only one laptop and phone.
The alleged bribes came from the way Alameda Research was run. According to the accusation, two of China’s top cryptocurrency exchanges had roughly $1 billion in cryptocurrencies in particular Alameda cryptocurrency trading accounts that Chinese law enforcement officials had frozen in early 2021.
According to the accusation, Bankman-Fried, 31, was aware that the accounts had been frozen by Chinese authorities as part of an ongoing investigation of a specific trading counterparty in Alameda.
The accusation stated that Bankman-Fried ultimately consented to direct a multimillion dollar bribe to try to unfreeze the accounts after numerous attempts over several months, including using lawyers to push, to no avail.
In an attempt to evade freeze orders and transfer cryptocurrency from frozen accounts to the fraudulent accounts, the indictment claims that Bankman-Fried and those under his direction opened new fraudulent accounts on Chinese exchanges using the personal information of several people who were not connected to FTX or Alameda.
In November 2021, a portion of the $40 million cryptocurrency bribe money was transferred from Alameda’s primary trading account to a personal cryptocurrency wallet, and the frozen accounts were unfrozen at the same time, according to the indictment.
According to the indictment, Bankman-Fried allowed the transfer of further tens of millions of dollars in bitcoin to complete the bribe after being informed that the accounts had been unfrozen.
Former Alameda CEO Carolyn Ellison is one among individuals already accused in the lawsuit. She, along with two former FTX executives who entered into cooperation agreements with the authorities and pled guilty, have consented to testify against Bankman-Fried.
The Chinese embassy in Washington, DC, as well as the Chinese consulate in New York, have both received messages seeking comment.
