Tags: ftx | sam bankman-fried | bribery conspiracy | foreign corrupt practices act

Bankman-Fried Charged in $40M Bribe to Chinese

Bankman-Fried Charged in $40M Bribe to Chinese
FTX founder Sam Bankman-Fried arrives at Manhattan federal court on Feb. 16, 2023 in New York. (John Minchillo/AP)

Tuesday, 28 March 2023 11:21 AM EDT

U.S. prosecutors Tuesday unveiled a new indictment against Sam Bankman-Fried, accusing the founder of now-bankrupt FTX cryptocurrency exchange of conspiring to pay a $40 million bribe to Chinese government officials.

The new bribery conspiracy charge adds the pressure on the 31-year-old former billionaire, who now faces a 13-count indictment over the November collapse of FTX.

Prosecutors had previously accused Bankman-Fried of stealing billions of dollars in customer funds to plug losses at his Alameda Research hedge fund, and orchestrating an illegal campaign donation scheme to buy influence in Washington, D.C.

A spokesman for Bankman-Fried declined to comment.

Bankman-Fried is expected to be arraigned on Thursday in Manhattan federal court. U.S. District Judge Lewis Kaplan will also consider modifications to his $250 million


BAIL PACKAGE

The indictment said Bankman-Fried ordered the $40 million cryptocurrency payment to a private wallet from Alameda's main trading account, to persuade Chinese authorities to unfreeze Alameda accounts with more than $1 billion of cryptocurrency.

Prosecutors said the Alameda accounts had been frozen as part of an investigation into an unnamed Alameda counterparty.

They also said Bankman-Fried later authorized a transfer of tens of millions of dollars of cryptocurrency to "complete" the bribe.

China's foreign ministry could not immediately be reached for comment after business hours in Beijing. The Chinese embassy in Washington, D.C. did not immediately respond to a request for comment.

Bankman-Fried has pleaded not guilty to eight of the 13 counts he faces, and not yet been arraigned on the campaign finance or bribery conspiracy charges.

He has acknowledged inadequate risk management at FTX, but has denied stealing money.

Three onetime members of his inner circle - former Alameda CEO Caroline Ellison, former FTX technology chief Zixiao "Gary" Wang, and former FTX engineering chief Nishad Singh - have pleaded guilty and agreed to cooperate with prosecutors.


BAIL CONDITIONS

The newest charge accuses Bankman-Fried of conspiring to violate the Foreign Corrupt Practices Act, which makes it illegal for U.S. citizens to bribe foreign government officials to win business.

Bankman-Fried is confined to his parents' Palo Alto, California home ahead of his scheduled Oct. 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.

Under the new conditions, Bankman-Fried would be barred from using electronics except for a phone with no internet capability and a basic laptop with limited functions. The laptop would have monitoring software to track user activity.

Bankman-Fried's bail conditions became an issue after prosecutors raised concerns that he may have been tampering with witnesses.

Lawyers for Bankman-Fried say he contacted current FTX executives to offer help, not to interfere, but nonetheless agreed to restrictions on his use of electronics.

© 2024 Thomson/Reuters. All rights reserved.


StreetTalk
U.S. prosecutors Tuesday unveiled a new indictment against Sam Bankman-Fried, accusing the founder of now-bankrupt FTX cryptocurrency exchange of conspiring to pay a $40 million bribe to Chinese government officials.
ftx, sam bankman-fried, bribery conspiracy, foreign corrupt practices act
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2023-21-28
Tuesday, 28 March 2023 11:21 AM
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