Sam Bankman-Fried, the co-founder of cryptocurrency exchange FTX, has been accused of paying tens of millions of dollars in bribes to at least one Chinese government official, according to federal prosecutors. The allegations come as part of a new indictment released on Tuesday.
The indictment states that Bankman-Fried’s hedge fund, Alameda Research, had its accounts frozen by Chinese police in November 2021. The indictment goes on to allege that Bankman-Fried and others were responsible for transferring at least $40 million in cryptocurrency to one or more Chinese officials in an attempt to influence them to unfreeze the accounts.
Prosecutors claim that Bankman-Fried and his associates tried multiple methods to unfreeze the accounts, but ultimately resorted to paying a multimillion-dollar bribe to have the accounts unlocked. The unfrozen assets were then used to fund Alameda’s loss-generating trades, which the government alleges constituted fraud against customers and investors.
Legal battle continues for disgraced Sam Bankman-Fried
In November 2022, concerns about FTX and Alameda’s balance sheet led to a bank run, which ultimately caused the companies to implode. Bankman-Fried is now facing federal indictment and civil charges from both the Securities and Exchange Commission and the Commodity Futures Trading Commission.
The accusations against Bankman-Fried are the latest in a series of legal troubles facing cryptocurrency exchanges and their executives.