Sam Bankman-Fried faces another $40M additional Chinese bribery charge

The former CEO of bankrupt cryptocurrency exchange FTX, Sam Bankman-Fried, is facing an additional charge of bribing Chinese officials. US prosecutors are charging Bankman-Fried with conspiracy to violate the Foreign Corrupt Practices Act, which contains anti-bribery provisions.

Sam Bankman-Fried faces another $40M bribery charge

The US prosecutors overseeing the case against Bankman-Fried have added to the 12 count charges facing him. Another indictment shows that Bankman-Fried allegedly transferred around $40 million in bribes to Chinese officials. The bribe was made to persuade the officials to unfreeze accounts towards the end of 2021.

The state prosecutors say that Bankman-Fried failed to comply with the Foreign Corrupt Practices Act. Besides bribery, Bankman-Fried also faces multiple conspiracy, fraud, and money laundering counts.

The indictment document states that “In or about November 2021, Samuel Bankman-Fried, aka ‘SBF,’ the defendant, and others directed and caused the transfer of at least approximately $40 million in cryptocurrency intended for the benefit of one or more Chinese government officials in order to influence and induce them to unfreeze the Accounts.”

The United States Attorney for the Southern District of New York, Damian Williams, penned a letter to the Federal Court Judge overseeing Bankman-Fried’s case saying that a grand jury returned the new indictment charges on Monday. Damian also said that Bankman-Fried was yet to be arraigned on five additional charges that prosecutors had made.

Reports claim that the bribe paid to Chinese officials was linked to FTX’s sister company, Alameda Research. In 2021, accounts belonging to the crypto hedge fund with around $1 billion worth of digital assets were frozen by Chinese officials. The hedge fund had accounts with two of the largest cryptocurrency exchanges in China before the country banned crypto activities in 2021.

The collapse of FTX

FTX was among the crypto firms that filed for bankruptcy last year. The cryptocurrency exchange filed for bankruptcy on November 2022 after a liquidation crisis and a failure to raise additional funding. The exchange’s collapse resulted in an over $8 billion loss in customer deposits.

The operations of the exchange came to light after the bankruptcy filing. Details show that Bankman-Fried and other top executives at FTX and Alameda Research obtained $2.2 billion in loans and payments from FTX and Alameda.

Bankman-Fried was arrested in the Bahamas in December 2022 and later extradited to the United States, where he was granted bail on a $250M recognizance bond. He has since taken a plea of not guilty to eight charges. However, some former FTX and Alameda executives have pled guilty to charges facing them and are rumored to work closely with prosecutors.

Besides FTX, the other major collapse in the crypto industry last year was Terra Luna’s. Recently, the co-founder of Terra, Do Kwon, was arrested in Montenegro. The collapse of Terra wiped out around $40 billion from the market. Terra’s collapse also triggered contagion across the market and caused the downfall of Three Arrows Capital.