Former FTX CEO Sam Bankman-Fried (SBF) faces a 13-count indictment, including an alleged $40 million bribe to Chinese officials.
Sam Bankman-Fried, the founder and former CEO of the FTX cryptocurrency exchange, faces a 13-count indictment brought forth by United States authorities. Among the charges is an alleged $40 million bribe offered to a Chinese government official, as revealed in a court filing by U.S. attorney Damian Williams. Sam Bankman-Fried, also known as “SBF,” will stand trial on October 2, 2023, for allegations of embezzling billions of dollars from FTX customers and making illicit political contributions. If found guilty, he could serve up to 115 years in prison.
Bribery Allegations to Release Frozen Crypto Accounts
The latest indictment alleges that SBF and other associated parties orchestrated the transfer of approximately $40 million in cryptocurrency to benefit Chinese government officials. Moreover, the purported intention of this transaction was to sway and convince the officials to release frozen cryptocurrency accounts connected to Alameda Research, a company associated with FTX. Additionally, the accounts in question reportedly contained over $1 billion in cryptocurrency.
According to the court filing, in early 2021, Chinese law enforcement agencies froze several Alameda accounts on two prominent Chinese crypto exchanges. Furthermore, SBF knew about the freeze and made multiple attempts to release the accounts, including trying to move cryptocurrency to fake accounts to bypass China’s freeze orders.
After months of unsuccessful efforts to release the accounts, SBF allegedly discussed and agreed to orchestrate a multi-million-dollar bribe to secure the accounts’ release. Following the accounts’ unfreezing, Alameda allegedly used the liberated cryptocurrency to finance additional trading ventures.
The specific Chinese cryptocurrency exchanges that Alameda used in early 2021 remain unclear, as China officially prohibited crypto exchanges from operating within the country in 2017. Furthermore, China enacted a comprehensive ban on crypto in September 2021.
Forthcoming Arraignment and Court Proceedings
A letter addressed to the federal district court judge overseeing the case discloses that a grand jury returned the indictment on March 27, 2023. Moreover, the government has requested a pretrial conference to arraign SBF on the superseding indictment and to tackle any unresolved issues concerning his conditions of release. The introduction of the Foreign Corrupt Practices Act (FCPA) charge will not necessitate the production of any new categories of discovery, but the government is prepared to update the court on its ongoing discovery productions during the proposed conference.