U.S.federal prosecutors have charged FTX founder Sam Bankman-Fried in a new arraignment with conspiracy to bribe Chinese government officials with $40 million in payments. The new charge, which brings Bankman-Fried’s total charges to 13, accuses him of conspiring to break the FCPA, an act that prohibits U.S. citizens from bribing foreign officials to gain business.
Manhattan prosecutors accused Bankman-Fried of ordering the transaction to be made to defrost accounts that belonged to Alameda Research, his hedge fund, which the Chinese government had frozen. According to federal prosecutors, the accounts contained crypto worth more than $1 billion.
According to the charges, the accounts were reopened following the bribe payment’s transfer from Alameda’s primary trading account to a personal crypto wallet in November 2021. Afterward, the FTX founder authorized the transfer of millions of dollars’ worth of crypto to finalize the bribe.
Additionally, there is language in the charge that suggests a fifth arrest is about to be made in what U.S. attorney Damian Williams has repeatedly defined as an ongoing investigation. This unnamed person allegedly took part in the bribery conspiracy with Bankman-Fried.
Judge Lewis A. Kaplan scheduled an arraignment for Thursday based on the revised indictment. Additionally, he forbade Bankman-Fried from contacting any current or former employees of Alameda Research or FTX. The order also restricts him to using only one laptop and phone as well as forbids him from using any smart devices that have internet access.
The additional charge puts more pressure on 31-year-old Bankman-Fried, who had earlier entered a not-guilty plea to nine counts related to the demise of FTX. According to the prosecution, he illegally acquired billions of dollars from customers to cover Alameda’s losses. Bankman-Fried acknowledged FTX’s poor risk management but denied financial fraud.
Last month, four new charges were brought against Bankman-Fried by the prosecution, accusing him of planning a nefarious scheme to influence Washington, D.C., through the use of illegal campaign donations. He hasn’t yet been charged with the new allegations.
Following Kaplan’s suggestion that Bankman-Fried might be imprisoned pending trial, his attorneys and the prosecution came to a new understanding on the review of bail conditions. That followed the prosecutors’ concerns that Bankman-Fried might have been influencing witnesses.
Bankman-Fried is presently contained at his parent’s home in Palo Alto, California, on a $250 million bond in anticipation of his trial on Oct. 2, 2023.
The crypto world has survived several storms before, and no doubt entities such as Bit Digital Inc. (NASDAQ: BTBT) have shown their resilience by surviving the fallout that followed the collapse of FTX.
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