Sam Bankman-Fried’s legal troubles have deepened yet again with allegations of a Chinese bribery scheme.
An indictment unsealed by federal prosecutors Tuesday (March 28) accuses the former cryptocurrency wunderkind of greenlighting bribes of more than $40 million for Chinese government officials to regain access to frozen accounts in 2021.
It is the third such indictment against the FTX founder, accused of masterminding a multibillion-dollar fraud that continues to rock the crypto sector.
According to the latest indictment, the frozen accounts held more than $1 billion in cryptocurrency tied to Alameda Research, Bankman-Fried’s investment firm. The accounts were frozen, prosecutors said, as part of an investigation by the Chinese government into a “particular Alameda trading counterparty.”
After several attempts to unfreeze the accounts through other means — including hiring lawyers to lobby Beijing and setting up “fraudulent accounts” to transfer the frozen funds — Bankman-Fried authorized a $40 million bribe, the indictment said.
Once that bribe was paid, the Alameda accounts were unfrozen, prosecutors said, and Bankman-Fried directed the transfer of tens of millions of dollars in additional cryptocurrency. The alleged actions were in violation of the Foreign Corrupt Practices Act, prosecutors allege.
Bankman-Fried, 31, has pleaded not guilty to the charges against him and remains free on bail. He was first arrested last December, weeks after the collapse of FTX, and charged with multiple counts of fraud and conspiracy.
An unsealed indictment last month revealed a number of new charges against Bankman-Fried, including bank fraud, operating an unlicensed money transmitting business and violations of campaign finance laws.
His bail, however, remains an open question, as defense attorneys and prosecutors have been battling over the conditions of that bail.
Last week saw reports that the two sides were close to a new bail agreement, hammered out after prosecutors accused Bankman-Fried of witness tampering by attempting to get in touch with FTX’s general counsel.
Defense lawyers deny that claim, but Judge Lewis Kaplan has threatened to revoke Bankman-Fried’s bail if he doesn’t comply with restrictions on electronic communications.