The US is accusing the founder of the now-bankrupt FTX cryptocurrency exchange of conspiring to pay $40 billion to Chinese officials.
Prosecutors in the United States have unveiled a new indictment against Sam Bankman-Fried, accusing the founder of the now-bankrupt FTX cryptocurrency exchange of conspiracy to bribe Chinese government officials with $40 million in payments.
Federal prosecutors in Manhattan accused Bankman-Fried of directing the payment to unfreeze accounts of his hedge fund, Alameda Research, that had been frozen by Chinese authorities. The accounts contained more than $1 billion in cryptocurrency, US prosecutors said.
The accounts were released after the bribe was transferred from Alameda’s main trading account to a private cryptocurrency wallet around November 2021, according to the new indictment on Tuesday.
After the accounts were reversed, Bankman-Fried authorized a transfer of tens of millions of dollars in additional cryptocurrency to complete the bribe, prosecutors said.
The new indictment increases the pressure on the 31-year-old former billionaire, who had previously pleaded eight charges over the collapse of FTX. Prosecutors say Bankman-Fried stole billions of dollars in customer funds to cover losses at Alameda.
Bankman-Fried lawyers did not immediately respond to a request for comment. Bankman-Fried has acknowledged that risk management at FTX is inadequate, but denies stealing money.
China’s Foreign Ministry was not immediately available for comment after normal business hours in Beijing.
U.S. District Judge Lewis Kaplan scheduled a hearing for Thursday after prosecutors asked to prosecute Bankman-Fried on the new 13-count charge.
Prosecutors unveiled four new charges against Bankman-Fried last month, accusing him of orchestrating an illegal campaign donation scheme to buy influence in Washington, DC. He has not yet been charged with the new charges.
The new count charges Bankman-Fried with conspiracy 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 locked up at his parents’ home in Palo Alto, California, on $250 million bail, 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 prison pending trial. That came after prosecutors raised concerns that he may have tampered with witnesses.