Sam Bankman-Fried, founder of the failed cryptocurrency exchange FTX, directed $40 million in bribes to Chinese officials to unfreeze his accounts, federal officials said in a new indictment.
The superseding indictment, which was unsealed by the Southern District Court of New York on March 28, marked the 13th criminal charge filed against Bankman-Fried, who is under house arrest after posting a $250 million bond and confined to his parents’ home in Palo Alto, Calif.
DON'T MISS: Social Media Influencers Targeted in New FTX Lawsuit
The bribery charge was brought under the Foreign Corrupt Business Practices Act
According to court documents, Chinese officials in early 2021 froze certain trading accounts of FTX’s sister company Alameda Research that were being held in two of China’s largest cryptocurrency exchanges.
The accounts held about $1 billion worth of cryptocurrency and Bankman-Fried tried several ways to unfreeze the accounts, including hiring lawyers to lobby Chinese officials and creating fraudulent accounts in an attempt to circumvent the freeze orders.
After months of failed attempts to unfreeze the accounts, Bankman-Fried "authorized and directed the illicit transfer of cryptocurrency intended to induce and influence one or more Chinese government officials to unfreeze the accounts."
Transferring 'Tens of Millions of Dollars'
He directed the payment, which was worth about $40 million, to be transferred to a private cryptocurrency wallet. A short time later, the indictment said, the accounts were unfrozen.
Upon confirming the accounts were unfrozen, Bankman-Fried authorized "the transfer of additional tens of millions of dollars in cryptocurrency to complete the bribe."
Meanwhile, Judge Lewis A. Kaplan approved a modification to Bankman-Fried’s bail terms that aims to restrict his access to the internet following concerns about his use of a virtual private network, CNN reported.
Under the new conditions, Bankman-Fried will be permitted to use a VPN only for the purpose of accessing a database to help prepare his defense, via a laptop provided by his lawyers.
Federal prosecutors have already accused Bankman-Fried, or SBF, as he's known in crypto circles, of securities fraud, wire fraud, and multiple conspiracy counts, related to FTX customers and Alameda's lenders.
Additional charges include illegal campaign contributions, money laundering, operating an unlicensed money-transmitting business and bank fraud.
FTX and Alameda imploded in November 2022. Former Alameda CEO Caroline Ellison, FTX co-founder Gary Wang and Nishad Singh, FTX's former engineering director, have all pleaded guilty to criminal charges and are cooperating with prosecutors
Bankman-Fried criminal trial is scheduled to begin in October.
