FTX co-founder Sam Bankman-Fried paid tens of millions of dollars in bribes to at least one Chinese official, federal prosecutors allege in a new indictment.
The indictment said the accounts of Bankman-Fried’s hedge fund, Alameda Research, were the target of a freeze order from the Chinese police “during or around” November 2021.
The indictment alleges that Bankman-Fried and others “directed and caused the transfer” of at least $40 million in cryptocurrency “for the benefit of one or more Chinese officials to influence and urge them to release some of these accounts.
Previously, Bankman-Fried and his associates reviewed and tried “multiple methods” to free the accounts, which contained about $1 billion in cryptocurrency, prosecutors allege. Ultimately, after both legal and personal efforts failed, Bankman-Fried agreed and directed millions of dollars in bribes to unlock those frozen accounts, prosecutors allege.
Reportedly, crypto exchange FTX and the boom Alameda fund collapsed in November 2022, after concerns about their balance sheets turned into an actual bank run. Bankman-Fried now faces a federal indictment and civil charges from the Securities and Exchange Commission and the U.S. Commodity Futures Trading Commission.
The allegations indicate that the federal government has obtained new evidence of Bankman-Fried’s international transactions and come a day after US regulators slapped a crypto exchange. from Binance on charges of facilitating terrorist financing and violating U.S. securities derivatives laws.
As such, it can be seen that the new charge increases pressure on the 31-year-old former billionaire, who was previously believed to be involved in eight crimes related to the collapse of FTX. Prosecutors say Bankman-Fried stole billions of dollars in customer funds to cover losses for Alameda.
Judge Lewis Kaplan scheduled the new trial after prosecutors asked Bankman-Fried to be charged in the new 13-count indictment.
Bankman-Fried’s attorney did not immediately respond to a request for comment. Bankman-Fried has admitted inadequate risk management at FTX, but has denied stealing funds.
Prosecutors last month revealed four new charges against Bankman-Fried, accusing him of orchestrating an illegal campaign donation scheme to buy influence in Washington DC. But he has yet to be charged on the new charges.
New charges show Bankman-Fried conspired to violate the Foreign Corrupt Practices Act (FCPA), which makes it illegal for U.S. citizens to bribe foreign government officials to gain business. France.
Bankman-Fried is currently being held at his parents’ home in Palo Alto, California, on a $250 million bond before an October 2 trial.
On March 27, his lawyers and prosecutors reached a new agreement on revised bail conditions after Kaplan raised the possibility of sending Bankman-Fried to jail pending trial. It also comes after US prosecutors raised concerns that he may have tampered with a witness.
Judge Lewis A. Kaplan approved new bail conditions for Bankman-Fried that would severely limit his internet access following concerns he had used messaging apps and the former virtual private network.
Under the new terms, Bankman-Fried will be allowed access to two electronic devices – a laptop that is closely monitored and a phone that can only be used for voice and text calls. Kaplan writes: “He is prohibited from using any other mobile phone, tablet, computer, video game (including video game hardware and platforms) that allows chat or contact voice communication or “smart” devices with Internet access.
The laptop is largely under the control of his legal team, and Bankman-Fried will be restricted to some news sites and services like Netflix, Doordash, and even Gmail.
Bankman-Fried will only be allowed to use the VPN for database access purposes to help prepare its defense. When using a VPN, a lawyer must send someone from their firm to monitor him. The person would “stay with Mr. Bankman-Fried while he uses the laptop, and retrieve it and take it out of the house when he’s finished using it,” Kaplan wrote.
A spokesperson for Bankman-Fried did not immediately respond to CNBC’s request for comment.