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FTX founder Bankman-Fried charged with paying $40 million bribe

FTX founder Sam Bankman-Fried was charged with directing $40 million in bribes to one or more Chinese officials to unfreeze assets relating to his cryptocurrency business.

FTX founder Bankman-Fried charged with paying $40 million bribe

FTX founder Sam Bankman-Fried was charged with directing $40 million in bribes to one or more Chinese officials to unfreeze assets relating to his cryptocurrency business in a newly rewritten indictment unsealed Tuesday.

The charge of conspiracy to violate the anti-bribery provisions of the Foreign Corrupt Practices Act raises to 13 the number of charges Bankman-Fried faces after he was arrested in the Bahamas in December and brought to the United States soon afterward. The indictment was returned on Monday.

The charge also contains language revealing that a fifth arrest was imminent in what US Attorney Damian Williams has repeatedly described as a continuing investigation. That unidentified individual, according to the indictment, participated in the bribery conspiracy with Bankman-Fried and “will be arrested in the Southern District of New York.”

FTX filed for bankruptcy on November 11, when it ran out of money after the equivalent of a bank run on the global cryptocurrency exchange. He has remained free on a $250 million personal recognizance bond that lets him stay with his parents in Palo Alto, California.

He has pleaded not guilty to charges that he cheated investors out of billions of dollars before his business collapsed.An arraignment on the rewritten indictment was set for Thursday by US District Judge Lewis A Kaplan. He also on Tuesday banned Bankman-Fried from communicating with current or ex-employees of FTX or Alameda Research, its affiliated cryptocurrency hedge fund trading firm. The order also limits Bankman-Fried to one laptop and phone and bans him from encrypted communications or other cellphones, computers, or “smart” devices with internet access.The alleged bribes stemmed from the operation of Alameda Research. The indictment said Chinese law enforcement authorities in early 2021 froze certain Alameda cryptocurrency trading accounts containing about $1 billion in cryptocurrency on two of China’s largest cryptocurrency exchanges.

Bankman-Fried, 31, understood that the accounts had been frozen by Chinese authorities as part of an ongoing probe of a particular Alameda trading counterparty, the indictment said.

After Bankman-Fried failed multiple attempts over several months to unfreeze the accounts through methods including using lawyers to lobby, Bankman-Fried ultimately agreed to direct a multimillion dollar bribe to try to unfreeze the accounts, the indictment said.

Among failed attempts, the indictment said Bankman-Fried and others he directed opened new fraudulent accounts on the Chinese exchanges using personal identifying information of several individuals unaffiliated with FTX or Alameda to try to evade freeze orders and move cryptocurrency from frozen accounts to the fraudulent accounts.

FTX founder Bankman-Fried charged with paying $40 million bribe

A portion of the bribe payment of cryptocurrency, then worth about $40 million, was moved from Alameda’s main trading account to a private cryptocurrency wallet in November 2021 and the frozen accounts were unfrozen at about the same time, the indictment said.

After Bankman-Fried received confirmation that the accounts were unfrozen, he authorized the transfer of additional tens of millions of dollars in cryptocurrency to complete the bribe, according to the indictment.

Among those already charged in the case is Carolyn Ellison, Alameda’s former chief executive. She has agreed to testify against Bankman-Fried, as have two former FTX executives who have pleaded guilty in cooperation deals with the government.

Bankman-Fried’s lawyers did not immediately respond to messages seeking comment. Messages for comment were also sent to the Chinese consulate in New York and the Chinese embassy in Washington DC.

Sam Bankman-Fried is a prominent figure in the cryptocurrency industry and the founder of FTX, a leading cryptocurrency exchange. He is known for his success as a trader and entrepreneur in the crypto space.

Sam Bankman-Fried launched FTX in 2019, and the platform quickly gained popularity for its innovative features and advanced trading capabilities. FTX has become one of the fastest-growing cryptocurrency exchanges, offering a wide range of trading options, including spot trading, futures trading, and leveraged tokens.

Apart from FTX, Sam Bankman-Fried is also involved in various other ventures within the cryptocurrency ecosystem. He is the founder of Alameda Research, a quantitative cryptocurrency trading firm, and is actively involved in crypto investments and trading strategies.

Sam Bankman-Fried has gained attention for his philanthropic efforts as well. He has donated significant amounts of money to various causes, including effective altruism and animal welfare organizations.Sam Bankman-Fried, the founder of FTX, has emerged as a prominent and influential figure in the cryptocurrency industry. With a passion for trading and entrepreneurship, Bankman-Fried has made a significant impact in a relatively short span of time. He launched FTX in 2019, quickly establishing it as a leading cryptocurrency exchange known for its cutting-edge features and comprehensive trading options. Under his leadership, FTX has experienced exponential growth, attracting a global user base and gaining a reputation for reliability, innovation, and user-friendly interface. Alongside FTX, Bankman-Fried founded Alameda Research, a quantitative cryptocurrency trading firm, which has further solidified his presence in the crypto space. With his expertise in trading strategies and deep understanding of the market, Bankman-Fried has positioned himself as a prominent voice within the industry, providing insights and thought leadership. Beyond his entrepreneurial ventures, Bankman-Fried has also shown a strong commitment to philanthropy. He has generously donated substantial sums to causes close to his heart, such as effective altruism and animal welfare organizations. As the cryptocurrency industry continues to evolve, Sam Bankman-Fried’s contributions and entrepreneurial spirit are likely to shape its future trajectory.

May 2024
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