Former FTX boss Sam Bankman-Fried (SBF) has been hit with another lawsuit from the Department of Justice (DOJ) for sending millions of dollars in bribe money to Chinese government officials
The department alleges that the bribe, worth $40 million, was intended to unfreeze accounts tied to FTX’s sister trading firm, Alameda Research.
SBF Bribing China
In an updated, superseding indictment shared on Tuesday, the DOJ accused SBF of “directing and causing the transfer of at least $40 million in cryptocurrency” to unfreeze Alameda’s accounts for the benefit of “one or more Chinese government officials.”
This adds to 12 previous allegations against Bankman-Fried by the department, including wire fraud, commodities fraud, bank fraud, and others.
The filing states that Alameda’s accounts were frozen by Chinese police “in or around November 2021,” and held over $1 billion in crypto. Prosecutors reportedly tried “numerous methods” to unfreeze the accounts but resorted to bribery after exhausting all other options.
Once the funds were unfrozen, the firm allegedly used them to continue trading at a loss for Alameda Research. Alameda is suspected of misappropriating FTX customer funds for trading, resulting in the loss of billions of dollars in assets.
While Bankman-Fried denies any allegations of fraud, many in his executive circle – including former Alameda CEO Caroline Ellison and FTX co-founder Gary Wang – have pleaded guilty.
FTX engineering lead Nishad Singh later joined Ellison and Wang in their guilty plea, admitting to money laundering and campaign finance violations. He and SBF allegedly conspired to make illegal donations totalling tens of millions of dollars to political candidates in a straw donor scheme involving over 300 individual donations.
Bankman-Fried’s Political Connections
SBF’s political ties are well-known: the former executive used to hold meetings with SEC chairman Gary Gensler on Capitol Hill and has travelled with former CFTC chairman Mark Wetjen, among others.
CME chief Terry Duffy remarked in November that Congress appeared unfriendly to his criticisms of Bankman-Fried, who was one of the Democratic Party’s biggest individual donors. SBF claims that although his political donations were significant, he also used “dark money” to donate a roughly equivalent amount to Republican candidates.
Republican congressman Tom Emmer claimed in December to have received reports of a conspiracy between Bankman-Fried and the SEC to create a regulatory monopoly in the exchange business.