SBF has just been accused of bribing Chinese officials with “at least $40 million” to unlock frozen trading accounts in China! Here is what you need to know…
SBF Accused Of Bribing Chinese Officials With $40 Million!
Sam Bankman-Fried, better known as SBF, has just been hit with fresh charges by US officials, who accuse the crypto-preneur of authorising a bribe of “at least $40 million” (about £32.5 million) to unlock frozen trading accounts in China!
In the updated indictment (PDF download), SBF was said to have approved the $40 million bribe after Chinese authorities froze Alameda Research trading accounts that were holding roughly $1 billion or £811 million worth of cryptocurrencies.
… in or about 2021, SAMUEL BANKMAN-FRIED, a/k/a “SBF”, the defendant, authorised and directed a bribe of at least $40 million to one or more Chinese government officials.
The purpose of the bribe was to influence and induce one or more Chinese government officials to unfreeze certain Alameda trading accounts containing over $1 billion in cryptocurrency, which had been frozen by Chinese authorities.
SBF now faces a total of 13 criminal charges, including this new additional charge. He could potentially be jailed for more than 100 years if convicted.
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How SBF Allegedly Bribed Chinese Officials With $40 Million!
In early 2021, Chinese authorities froze some Alameda Research accounts on two of China’s largest cryptocurrency exchanges, freezing approximately $1 billion in cryptocurrency stored in those accounts.
At that time, SBF believed that the accounts were frozen as part of an ongoing investigation into another company that was trading with Alameda Research.
At least, SBF and others working for him tried “numerous methods” to unfreeze those accounts, including:
- retaining lawyers in China to lobby for the Alameda accounts to be unlocked,
- communicating with the Chinese cryptocurrency exchanges, and
- opening new accounts on those Chinese cryptocurrency exchanges using several individuals unaffiliated with FTX (the “Fraudulent Accounts”) and then attempting to transfer cryptocurrency from the frozen accounts to those Fraudulent Accounts.
After months of failed attempts to unlock those frozen accounts, SBF and unnamed partners discussed and “ultimately agreed” to a multi million dollar bribe to unfreeze those accounts.
The indictment specifically called out SBF for authorising and directing the “illicit transfer of cryptocurrency” to “induce and influence one or more Chinese government officials to unfreeze the Accounts”.
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Following SBF’s authorisation and instructions, Alameda Research employees transferred cryptocurrency worth about $40 million from the Alameda main trading account to a private cryptocurrency wallet in November 2021, after which the Accounts were unfrozen.
After confirming that the accounts were unfrozen, SBF then authorised the transfer of “additional tens of millions of dollars in cryptocurrency to complete the bribe“.
Thanks to the unfreezing of its accounts, Alameda was able to continue funding its trades, and continue what the government says was a fraud upon its customers and investors for another year.
FTX and Alameda would later implode in November 2022, with SBF arrested in December and charged with defrauding FTX customers, investors and lenders, as well as conspiracy to commit bank fraud, conspiracy to operate an unlicensed money transmitting business, conspiracy to commit money laundering, and conspiracy to make unlawful political contributions and defraud the Federal Election Commission.
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