September 30, 2023

FTX co-founder Sam Bankman-Fried paid hundreds of millions of dollars in bribes to at least one Chinese government official, federal prosecutors alleged in a new indictment on Tuesday.

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The indictment says accounts belonging to Bankman-Fried’s hedge fund, Alameda Research, were the target of a freezing order from Chinese police “in or around November 2021.”

The indictment alleges that Bankman-Fried and others “directed and caused the transfer” of at least $40 million in cryptocurrency “in order to influence and induce them to benefit one or more Chinese government officials”. to unfreeze some of these accounts”.

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Prosecutors allege that Bankman-Fried and her associates considered and tried “multiple methods” to unfreeze the accounts, which contained approximately $1 billion worth of cryptocurrencies. Ultimately, after both legal and personal efforts failed, Bankman-Fried agreed to pay multimillion-dollar bribes to unlock the frozen accounts, prosecutors alleged.

Bankman-Fried’s hedge fund used non-frozen assets to continue Almeida’s loss-making trades, which the government says continue to defraude clients and investors for another year. FTX and Alameda turned into a veritable bank run in November 2022 following concerns about their balance sheets. Bankman-Fried now faces a federal indictment and civil charges from both the Securities and Exchange Commission and the Commodity Futures Trading Commission.

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The allegations indicate new evidence has been obtained by the federal government regarding Bankman-Fried’s international transactions, and come a day after US regulators charged crypto exchange Binance with charges of facilitating terrorist financing and violations of US derivatives law. Slapped.

Meanwhile, Bankman-Fried’s collapsed FTX remains in Delaware bankruptcy court proceedings.

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A spokeswoman for Bankman-Fried did not immediately respond to CNBC’s request for comment.