According to a revised indictment filed in a federal court in Manhattan on Tuesday, March 28, former FTX CEO Sam Bankman-Fried is accused of paying a $40 million bribe to Chinese government officials.
The bribe was allegedly paid in cryptocurrency in order to regain access to trading accounts that had been frozen by Chinese law enforcement. The accounts were linked to Alameda Research, FTX's sister company, Nikkei Asia reports.
The accounts allegedly contained more than $1 billion in cryptocurrency.
SBF Repeatedly Tried to Unfreeze Alameda Accounts
According to the most recent indictment, Bankman-Fried attempted to unfreeze the accounts associated with Alameda Research numerous times, including hiring attorneys to lobby on the company's behalf in China.
He also attempted to transfer funds and avoid Chinese authorities' freeze orders by using the personal identifying information of several individuals not affiliated with FTX or Alameda.
Bankman-Fried allegedly directed the multimillion-dollar bribe after months of unsuccessful attempts to unfreeze the accounts. As stated in the indictment, an Alameda employee sent crypto payment instructions for at least a part of the bribe payment to other Alameda employees on his instruction.
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"After months of failed attempts to unfreeze the accounts, Samuel Bankman-Fried discussed with others and ultimately agreed to and directed a multi-million-dollar bribe to seek to unfreeze the accounts," the indictment detailed.
The indictment also described that by November 2021, Bankman-Fried prompted a bribe payment of approximately $40 million to be transferred from Alameda to a private crypto wallet.
The accounts were unfrozen at the time of the payment, prompting Bankman-Fried to transfer tens of millions of dollars in cryptocurrencies. The unfrozen accounts were then used to fund additional trading activity by Alameda.
According to Cointelegraph, Alameda was using Chinese cryptocurrency exchanges in early 2021, as China banned outright crypto exchanges from offering services in the country in 2017.
Bankman-Fried was already charged with eight criminal counts after being extradited from his home in the Bahamas in December. The government expanded its case against him last month, charging him with securities fraud and conspiracy to commit bank fraud which experts said could translate into 40 years of jail time for SBF.
What's Next?
SBF's newest indictment comes after a third former colleague, Nishad Singh, reached a plea deal with prosecutors last month.
Singh, a former FTX head of engineering, has agreed to assist the government in building its case against Bankman-Fried, along with former Alameda exec Caroline Ellison and FTX co-founder Gary Wang.
The criminal trial for Bankman-Fried is scheduled for October. He is accused of stealing billions of dollars in FTX customer funds that were channeled through Alameda Research.
In Other News
Binance, the world's largest cryptocurrency exchange, has decided to temporarily suspend spot trading on its platform.
The announcement came after Bitcoin, the most popular cryptocurrency, fell by 3% on Friday, March 24. Binance is currently investigating the possible cause of the spot trading issue.
Stay posted here at Tech Times.
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