Sam Bankman-Fried Faces Bribery Charges
- A new 13-count superseding indictment has accused Sam Bankman Fried of bribing one or more Chinese officials in order to unfreeze accounts connected to Alameda.
- In early 2021, Chinese authorities froze certain Alameda accounts on two of China’s largest crypto exchanges”, which reportedly held more than $1 billion worth of crypto assets.
Former CEO of FTX Sam Bankman-Fried leaves the Federal Court in New York after pleading not guilty, 3 January, 2022.
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The founder and former CEO of crypto exchange FTX, Sam Bankman-Fried (SBF), is facing a new indictment in the U.S. that has added 13 new charges against him, court documents unsealed on 28 March show.
According to the superseding indictment, U.S. prosecutors have accused the former CEO of conspiracy to violate the anti-bribery provisions in the Foreign Corrupt Practices Act by directing and causing the transfer of at least $40 million in crypto “intended for the benefir of one or more Chinese government officials”. The transaction was made in an attempt to bribe Chinese officials to unfreeze cryptocurrency accounts that belonged to FTX’s affiliate firm Alameda Research. The filing reads:
“In or about November 2021, Samuel Bankman-Fried, a/k/a “SBF”, the defendant, and other 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 indictment claims that around early 2021, Chinese law enforcement authorities froze some of Alameda Research’s accounts on two of “China’s largest crypto exchanges”, which reportedly held more than $1 billion worth of assets. SBF was aware of the incident and tried various methods to unfreeze the accounts, but after months of failed attempts agreed to the multi-million bribe.
After the accounts were unfrozen, prosecutors alleged that the company used the released crypto assets to fund additional trading activity at Alameda Research. It remains unknown which were the two Chinese crypto exchanges Alameda was using in 2021, considering the country officially banned such platforms from providing services in 2017, and then enforced a blanket ban on crypto assets in 2021.
This is not the only development that happened on Tuesday, with U.S. District Judge Lewis Kaplan approving changes to SBF’s bail, further restricting his use of electronic devices. The former CEO is now restricted to using a new laptop and phone that have access to only 40 pre-approved websites needed for his defense. The laptop also includes a software that blocks access to USB devices, and also tracks his online activities.
- The DoJ discovered the Forsage used smart contracts with coding consistent of a Ponzi scheme, and charged its four founders with conspiracy to commit wire fraud.
- The U.S. SEC charged nearly a dozen individuals involved in the DeFi platform in August 2022, while the Philippines SEC flag Forsage as a Ponzi scheme back in 2020.
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- SBF’s defense is already looking into, and contacting possible independent technical experts to advise the court on his bail terms.
- The proposal for a technical advisor was made last week, when prosecutors asked for tighter bail conditions due to SBF’s use of VPN and encrypted messaging apps.
- Back on 30 January, Judge Lewis Kaplan ruled in favor of four separate petitions from major news outlets to release the names of the two co-signers of the $250 million bail bond.
- SBF, however, continues with his attempts to keep their identities a secret, and his appeal will now prevent the court order from being enforced until 14 February.