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All on Wed Mar 29 10:40:50 2023
THE NEW YORK TIMES
Sam Bankman-Fried Is Charged With Foreign Bribery
Federal prosecutors said the FTX founder had
instructed employees to pay $40 million to Chinese
officials to help unfreeze accounts maintained
by FTX’s sister company, Alameda Research.
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Federal prosecutors added a foreign bribery charge to the list of crimes already pending against the FTX founder Sam Bankman-Fried, according to a new indictment filed in federal court in Manhattan on Tuesday.
Federal prosecutors said that in 2021, Mr. Bankman-Fried instructed those working for him to pay a bribe of $40 million to one or more Chinese officials to help unfreeze trading accounts maintained by Alameda Research, FTX’s sister company, that held
about $1 billion in cryptocurrency.
The bribe was paid to the unnamed Chinese officials in cryptocurrency and succeeded in getting the trading accounts unfrozen, the document said.
The bribery charge was brought under the Foreign Corrupt Business Practices Act, a federal law used by the authorities to go after big corporations for paying bribes to operate in other countries.
Federal prosecutors have now charged Mr. Bankman-Fried with 13 criminal counts, including securities fraud, money laundering and campaign finance violations. The mounting charges not only add years to the potential prison time he faces if convicted but
could put more pressure on him to enter a guilty plea.
A spokesman for Mr. Bankman-Fried did not have an immediate comment on the newest charge. Mr. Bankman-Fried, 31, was freed after posting bail but is confined to his parents’ home in Palo Alto, Calif.
Federal prosecutors in Manhattan filed the first set of criminal charges against Mr. Bankman-Fried in December, a month after FTX collapsed into bankruptcy. The top charge is that he misappropriated billions of dollars in customer deposits for his own
personal use and to make up for hefty losses incurred by Alameda.
The authorities said that in early 2021, Chinese officials froze the money in the Alameda accounts, which were held in two of China’s largest cryptocurrency exchanges. The accounts had been frozen in connection with an investigation into one of Alameda�
��s trading partners.
Mr. Bankman-Fried came up with the plan to pay bribes, prosecutors said, after other efforts to unfreeze the money were unsuccessful, including hiring lawyers to lobby Chinese officials and creating fraudulent accounts in an attempt to deceive the
Chinese authorities.
The bribe, according to the federal prosecutors, was paid in at least two parts, with the first taking place in November 2021.
The indictment said that after Mr. Bankman-Fried received confirmation that the accounts were unfrozen, the rest of the bribe was paid. The unfrozen funds were then used to fuel additional trading at Alameda.
The charging document does not identity the Chinese officials or the employees who assisted Mr. Bankman-Fried in paying the bribe. But it said at least one of the Alameda employees was in the United States.
Alameda, which Mr. Bankman-Fried co-founded in 2017, was originally based in Berkeley, Calif., but soon moved to Hong Kong and operated from there until FTX’s implosion in November.
The authorities have said Mr. Bankman-Fried and his top lieutenants concealed from customers, investors and lenders some of the details of the close relationship between Alameda and FTX. In particular, they did not disclose that Alameda was tapping into
customer money at will to make trades and patch up any losses it incurred.
Three former executives who worked closely with Mr. Bankman-Fried have pleaded guilty and are cooperating with the authorities. Among them is Caroline Ellison, who was a leader at Alameda.
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