Former FTX boss Sam Bankman-Fried (SBF) has been slapped with another lawsuit from the Department of Justice (DOJ) for sending millions of dollars in bribe money to Chinese government officials
The department claims that the bribe, worth $40 million, was to induce the government to unfreeze accounts connected to FTX’s sister trading firm, Alameda Research.
SBF Bribing China
In an updated, superseding indictment shared Tuesday, the DOJ alleged that SBF “directed and caused the transfer of at least $40 million in cryptocurrency” to unfreeze Alameda’s accounts, to the benefit of “one or more Chinese government officials.”
This comes atop 12 previous allegations from the department against Bankman-Fried, including wire fraud, commodities fraud, bank fraud, and others.
According to the filing, Alameda’s accounts were frozen by Chinese police “in or around November 2021,” and held upwards of $1 billion in crypto. CNBC stated that prosecutors tried “numerous methods” to unfreeze those accounts, only to resort to bribery after all other options were exhausted.
Having unfrozen those funds, the firm allegedly used them to continue trading at a loss at Alameda Research. Alameda is widely suspected to have misappropriated FTX customer funds for trading, losing billions of dollars in assets in the process.
Though Bankman-Fried has denied any allegations of fraud, much of his executive inner circle – including former Alameda CEO Caroline Ellison and FTX co-founder Gary Wang – have pled guilty.
FTX engineering lead Nishad Singh joined Ellison and Wang later in their guilty plea, also admitting to money laundering and campaign finance violations. He and SBF allegedly conspired to make tens of millions of dollars of illegal donations to political candidates in a straw donor scheme involving over 300 individual donations.
Bankman-Fried’s Political Dealings
SBF’s political connections are no secret: the former executive used to regularly appear on Capitol Hill to hold meetings with SEC chairman Gary Gensler, and has also been reported traveling with former CFTC chairman Mark Wetjen.
CME chief Terry Duffy said in November that congress seemed hostile to his criticisms of Bankman-Fried, who was one of the Democratic Party’s largest individual donors. SBF claimed that while his political donations were large, he used “dark money,” to send a roughly equal amount to Republican candidates.
Republican congressman Tom Emmer claimed to have received reports in December that Bankman-Fried was conspiring with the SEC to create a regulatory monopoly in the exchange business.