FTX founder Sam Bankman-Fried has been charged with directing $US40 million ($59.6 million) in bribes to one or more Chinese officials to unfreeze assets relating to his cryptocurrency business in an indictment that was unsealed on Tuesday.
Key points:
- Bankman-Fried is expected to be arraigned on Thursday
- He has pleaded not guilty to 8 of the 13 counts he faces
- He will be barred from using certain electronics under revised bail conditions
The charge of conspiracy to violate the anti-bribery provisions of the United States’ 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.
He was previously charged with eight criminal violations, ranging from wire fraud to money laundering to conspiracy to commit fraud.
He was also charged with making illegal campaign contributions, a notable charge as Mr Bankman-Fried was one of the largest political donors this year.
FTX filed for bankruptcy on November 11 2022, when it ran out of money after the cryptocurrency equivalent of a bank run.
He has remained free on a $US250 million ($374 million) personal recognisance 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.
The alleged bribes stemmed from the operation of Alameda Research, which is affiliated with FTX, Bankman-Fried’s global cryptocurrency exchange.
The indictment said Chinese law enforcement authorities in early 2021 froze certain Alameda cryptocurrency trading accounts on two of China’s largest cryptocurrency exchanges.
The accounts, it said, contained about $US1 billion ($1.5 billion) in cryptocurrency.
Bankman-Fried 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 in several attempts to unfreeze the accounts through the use of lawyers and lobbying, he ultimately agreed to direct a multimillion dollar bribe to try to unfreeze the accounts, the indictment said.
The bribe payment of cryptocurrency then worth about $US40 million ($60 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.
Meanwhile on Tuesday, Judge Lewis A. Kaplan approved new bail conditions that will limit him to a laptop and a phone and block him from using any other mobile phones, tablets, computers, video games or “smart” devices with internet access other than electronic devices owned by his lawyers that he might need to prepare for trial.
Judge Kaplan set a hearing for Thursday.
AP/ABC