FTX: Bankman-Fried charged with paying $40m Chinese bribe
U.S. prosecutors on Tuesday unveiled a new indictment against Sam Bankman-Fried, accusing the founder of the now-bankrupt FTX cryptocurrency exchange of paying a $40 million bribe to Chinese officials so they would unfreeze his hedge fund’s accounts.
The new bribery conspiracy charge adds to the pressure on the 31-year-old former billionaire, who now faces a 13-count indictment over the November collapse of FTX.
Bankman-Fried is expected to be arraigned on the new indictment on Thursday before U.S. District Judge Lewis Kaplan in Manhattan federal court. He intends to plead not guilty, according to a person familiar with the matter.
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.
Lawyers for Bankman-Fried did not respond to a request for comment.
Separately on Tuesday, Kaplan approved modifications to Bankman-Fried’s $250 million bail package that are designed to prevent the defendant from tampering with witnesses.
The new indictment said Bankman-Fried ordered the $40 million cryptocurrency payment to a private wallet from Alameda’s main trading account, to persuade Chinese government 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, and Bankman-Fried’s prior efforts to lobby Chinese officials to lift the freeze were unsuccessful.
They also said Bankman-Fried around November 2021 authorized a transfer of tens of millions of dollars of additional 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 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 director Nishad Singh – have pleaded guilty and agreed to cooperate with prosecutors.
By Luc Cohen and Jonathan Stempel, Reuters