MANHATTAN (CN) — The Department of Justice unsealed a superseding indictment Tuesday against Sam Bankman-Fried, adding a 13th criminal charge that accuses the FTX co-founder of paying Chinese officials a $40 million bribe to unfreeze cryptocurrency trading accounts worth $1 billion.
Bankman-Fried already faces multiple counts of fraud and conspiracy for allegedly misappropriating billions of dollars of FTX customers’ funds to pay expenses and debts of a crypto hedge fund, Alameda Research, of which he was a co-founder and majority share owner. The superseding indictment, unsealed by the Southern District Court of New York on Tuesday, adds an additional count of bribery.
“In or about 2021, Samuel Bankman-Fried, a/k/a 'SBF,' the defendant, authorized and directed a bribe of at least $40 million to one or more Chinese government officials,” the superseding indictment states. “The purpose of the bribe was to influence and induce one or more Chinese government officials to unfreeze certain Alameda trading accounts containing over $1 billion in cryptocurrency, which had been frozen by Chinese authorities.”
Prosecutors say Bankman-Fried ordered the bribe only after other tactics to regain access to the billion dollars’ worth of crypto assets failed. These unsuccessful efforts, according to the indictment, “includ[ed] retaining attorneys to lobby or otherwise advocate in China for Alameda's funds to be unfrozen; communicating with the Chinese Exchanges; and opening new accounts on the Chinese Exchanges using the personal identifying information of several individuals unaffiliated with FTX or Alameda and attempting to transfer the cryptocurrency from the frozen Accounts to the Fraudulent Accounts in an effort to circumvent the Chinese authorities' freeze orders.”
Bankman-Fried is said to have confirmed that the Chinese officials whom he had paid off unfroze his accounts, then authorized the transfer of additional tens of millions of dollars in cryptocurrency to complete the bribe.
The initial indictment unsealed in December 2022 charged the defendant with eight criminal counts.
At a pretrial conference before U.S. District Judge Lewis Kaplan on Thursday, March 30, the 30-year-old accused of orchestrating one of the largest financial frauds in history is expected to arraigned on the new charge and four others filed in the intervening months.
Thanks to a $250 million bond, Bankman-Fried has spent the last three months confined to his parents’ home in Palo Alto, California, on house arrest.
Judge Kaplan recently tightened Bankman-Fried’s bail conditions after prosecutors flagged suspicious online activity using encrypted messaging apps and virtual private network.
FTX was the third-largest cryptocurrency exchange, though it ended up with billions of dollars’ worth of losses — estimates range from $8 billion to $10 billion — before seeking bankruptcy protection after a spectacular crash that took only a few days.
By the time FTX filed for bankruptcy on Nov. 11, it had run out of money in the cryptocurrency equivalent of a bank run.
At the height of cryptocurrency’s pandemic-era boom, the Miami Heat’s arena had briefly been called FTX Arena, and a 19-year, $135 million sponsorship agreement between FTX and the county was just getting underway when the team and Miami-Dade County decided to terminate their relationship with FTX on the same day the cryptocurrency exchange filed for bankruptcy.
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