US accuses founder of now-bankrupt FTX cryptocurrency exchange of conspiring to pay $40bn to Chinese officials.
United States prosecutors have unveiled a new indictment against Sam Bankman-Fried, accusing the founder of now-bankrupt FTX cryptocurrency exchange of conspiring to bribe Chinese government officials with $40m worth of payments.
Federal prosecutors in Manhattan charged Bankman-Fried with directing the payment in order to unfreeze accounts belonging to his hedge fund, Alameda Research, that Chinese authorities had frozen. The accounts held more than $1bn of cryptocurrency, US prosecutors said.
The accounts were unfrozen after the bribe payment was transferred around November 2021 from Alameda’s main trading account to a private cryptocurrency wallet, according to the new indictment on Tuesday.
After the accounts were unfrozen, Bankman-Fried authorised a transfer of tens of millions of dollars of additional cryptocurrency to complete the bribe, prosecutors said.
The new charge increases the pressure on the 31-year-old former billionaire, who had previously pleaded not guilty to eight counts over the collapse of FTX. Prosecutors say Bankman-Fried stole billions of dollars in customer funds to plug losses at Alameda.
Lawyers for Bankman-Fried did not immediately respond to a request for comment. Bankman-Fried has acknowledged inadequate risk management at FTX, but has denied stealing money.
China’s foreign ministry could not immediately be reached for comment after normal business hours in Beijing.
US District Judge Lewis Kaplan scheduled a court hearing for Thursday after prosecutors asked for Bankman-Fried to be arraigned on the new, 13-count indictment.
Prosecutors last month unveiled four new counts against Bankman-Fried, accusing him of orchestrating an illegal campaign donation scheme to buy influence in Washington, DC. He has not yet been arraigned on the new charges.
The new count accuses Bankman-Fried of conspiring to violate the Foreign Corrupt Practices Act (FCPA), which makes it illegal for US citizens to bribe foreign government officials to win business.
Bankman-Fried is currently confined to his parents’ Palo Alto, California home on $250m bond ahead of his October 2 trial.
On Monday, his lawyers and prosecutors reached a new agreement on revised bail conditions, after Kaplan raised the prospect of sending Bankman-Fried to jail pending trial. That came after prosecutors raised concerns he may have been tampering with witnesses.