ALBAWABA — Former FTX co-founder and chief executive officer Sam Bankman-Fried authorized a cryptocurrency bribe of at least $40 million to a Chinese government official, United States federal prosecutors claimed in an indictment on Tuesday.
The bribe came after Chinese officials in late 2021 froze some $1 billion in crypto trading accounts controlled by FTX affiliate Alameda Research, according to an amended criminal indictment signed by U.S. Attorney Damian Williams.
After both legal and personal efforts failed, Bankman-Fried agreed to and directed a bribe to have the frozen accounts unlocked, prosecutors claim.
The indictment claims that Bankman-Fried and others “directed and caused the transfer” of at least $40 million in crypto “intended for the benefit of one or more Chinese government officials in order to influence and induce them” to unfreeze of the accounts.
Alameda Research then used the unfrozen assets to continue to fund its loss-generating trades, defrauding customers and investors for another year, prosecutors allege.
Ultimately, FTX and Alameda collapsed in November 2022 after concerns about their balance sheet turned into a full-blown bank run, dissolving a virtual trading business that at one point had a market value of over $32 billion.
Bankman-Fried faces a federal indictment and civil charges from both the Securities and Exchange Commission and the Commodity Futures Trading Commission.
The indictment amounts to a 13th criminal charge against Bankman-Fried, for "conspiracy to violate the anti-bribery provisions of the Foreign Corrupt Practices Act".
Bankman-Fried has also been charged with wire fraud, conspiracy to commit money laundering as well as election finance violations, to which he has pleaded not guilty.
FTX remains mired in Delaware bankruptcy court proceedings.
