Federal prosecutors today charged FTX founder Sam Bankman-Fried under the Foreign Corrupt Practices Act for allegedly paying $40 million in bribes to Chinese government officials to unfreeze the cryptocurrency trading accounts of his hedge fund in the country.
The 31-year-old former billionaire now faces 13 criminal counts linked to his alleged misappropriation of FTX customer deposits to prop up his Alameda Research hedge fund.
The government alleges that in 2021, Chinese law enforcement froze multiple Alameda trading accounts on two of the country’s largest crypto exchanges as part of an investigation into a “particular Alameda trading counterparty.”
Prosecutors say that after multiple attempts to unfreeze the accounts — which collectively contained roughly $1 billion worth of digital assets — Bankman-Fried directed Alameda employees to pay Chinese government officials a $40 million crypto-based bribe.
“At or around the time of the $40 million bribe payment, the accounts were unfrozen,” the indictment reads. “After the accounts were unfrozen, at the direction of Samuel Bankman-Fried, a/k/a ‘SBF,’ the defendant, Alameda used the unfrozen cryptocurrency to fund additional Alameda trading activity.”
Bankman-Fried is scheduled to appear in court Thursday to be arraigned on the FCPA charge and four other fraud counts that were added to the original indictment in February. He has pleaded not guilty to all the charges.