Xavier Roger
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FTX founder Sam Bankman-Fried has been accused of funneling $40 million in bribes to two or more Chinese officials in order to release assets connected to his cryptocurrency business, an unsealed indictment on Tuesday shows.
The new charges are the latest legal troubles for the 31-year-old cryptocurrency entrepreneur, who has faced a series of fraud allegations since he was arrested last December in the Bahamas.
Bankman-Fried’s most recent indictment, unsealed by the Southern District Court of New York, alleges conspiracy to violate the anti-bribery provisions of the Foreign Corrupt Practices Act.
Prosecutors claim he was trying to get foreign officials to unlock accounts belonging to his hedge fund, Alameda Research, which China had frozen as part of a crackdown on cryptocurrencies.
The accounts, according to the indictment, hold roughly $1 billion in cryptocurrency.
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Bankman-Fried faces 13 charges
Federal prosecutors have slapped Bankman-Fried with 13 criminal charges in total since he was extradited from the Bahamas to face federal fraud allegations related to the misappropriation of billions of dollars of customer funds.
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In January, he pleaded not guilty to an eight-count criminal indictment in which Bankman-Fried was accused of illegally commingling funds of FTX Trading Ltd. with Alameda Research LLC, to fund luxury real estate purchases and other personal expenses, as well as illegal federal campaign contributions.
Two former business associates of Bankman-Fried, Caroline Ellison and Gary Wang, have already pleaded guilty to federal charges. Both have agreed to cooperate with prosecutors investigating the alleged fraud scheme.
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FTX — which is short for “Futures Exchange” — filed for bankruptcy last November in what was initially thought of as an old-fashioned bank run on the exchange’s reserves.
But federal investigators allege Bankman-Fried oversaw a massive con that included stealing deposits from his own company to pay for bets at his hedge fund while still living an affluent lifestyle.
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FTX was one of the largest and busiest platforms for trading cryptocurrency, and had an estimated $32 billion value in January. It is believed that about $1 billion of customer funds are missing.
Changes to the bail terms
Bankman-Fried has been out on bail for months after posting a $250 million personal recognizance bond.
That said, U.S. District Judge Lewis A. Kaplan has put strict bans on Bankman-Fried’s communication with the outside world.
For starters, he cannot communicate with current or former FTX employees, according to Tuesday’s order.
Kaplan also has limited Bankman-Fried to the use of one laptop and phone for the purpose of his legal defense under the supervision of his attorneys. He is also blocked from using other communication devices with internet access.
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