Sam Bankman Fried has been accused of bribing Chinese officials, adding a new dimension to the US government’s case against the FTX co-founder.
The charge was revealed Tuesday in Revised indictment by federal prosecutors in Manhattan. Bankman Fried is accused of authorizing a $40 million payment to get Chinese officials to unfreeze accounts at Alameda Research, a Hong Kong trading company affiliated with FTX, that owns more than $1 billion.
According to prosecutors, Alameda’s accounts were frozen in 2021 as part of the Chinese government’s investigation into two cryptocurrency exchanges in that country. Those exchanges were OKX and Huobi Capital, according to people familiar with the matter.
A Bankman-Fried spokesperson declined to comment.
13 indictments
Charged with conspiracy to violate the Foreign Corrupt Practices Act, Bankman-Fried now faces 13 criminal charges. He has pleaded not guilty to several counts of fraud alleging the transfer of billions of dollars from the now bankrupt FTX to Alameda as well as for personal expenses.
Three of his close associates, Gary Wang, Caroline Ellison and Nashad Singh, have pleaded guilty to fraud and are cooperating with the government.
Bankman-Fried is free on a $250 million bail package and is scheduled to face trial in October. He was arrested in the Bahamas, where his FTX cryptocurrency empire was located, in December and extradited to the United States.
An amended indictment earlier, in February, strengthened campaign finance charges against Bankman-Fried, a major donor to Democratic political candidates. Prosecutors alleged that Bankman-Fried conspired to influence cryptocurrency regulation in the United States through donations he and others made at FTX.
According to the latest indictment, Chinese law enforcement authorities have frozen Alameda’s trading accounts as part of an investigation into a counter party to the two exchanges.
Along with Binance, OKX and Huobi were among the largest cryptocurrency exchanges in the world in terms of trading volume before the Chinese government cracked down on digital currency trading in 2017.
OKX and Huobi did not immediately respond to requests for comment on Tuesday.
Bankman-Fried and “others working at his direction” attempted to unfreeze Alameda’s accounts in 2021, including by enlisting lawyers to lobby in China for the release of assets and attempt to divert cryptocurrency into fraudulent accounts set up on a Chinese exchange.
After months of failed attempts, prosecutors allege that Bankman-Fried directed a bribe in the form of cryptocurrency to be transferred from Alameda’s main trading account to a private wallet. The accounts were later unfrozen, and Bankman-Fried authorized the transfer of the remaining bribe.
Prosecutors allege that Bankman-Fried and others sought to regain access to assets in Alameda’s accounts to fund additional trading activity.
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