The American investor Samuel Benjamin Bankman-Fried has been charged with violating the US anti-corruption law as the prosecutors accused him of bribing Chinese government officials.
The filing made on Tuesday claimed that the FTX founder got involved in fraudulent activity to regain access to over $1 billion in cryptocurrency. Since the collapse of the crypto exchange, this is the third indictment faced by the famed entrepreneur.
As per the lawsuit, Bankman-Fried authorized bribing more than one Chinese government official to regain his access to the accounts which were earlier frozen by the law enforcement department of the country. Those accounts were frozen as a part of the investigation made into his crypto-investment firm named Alameda Research.
The lawsuit asserted that the accounts that were held with China’s cryptocurrency exchanges, contained around $1 billion in cryptocurrency. In addition to that, the prosecutors added that Bankman-Fried sent his employees over and again after a few failed attempts to regain access to the accounts. Initially, those accounts were unfrozen until it was reportedly engaged in an illicit payment, said the prosecutors. Furthermore, the indictment alleged that Bankman-Fried then again authorized the payment of several million in order to complete the bribe.
Since the illicit payments remained undiscovered in the beginning, Bankman-Fried directed the Alameda employees to engage in additional trades using the unfrozen crypto account, the indictment says. It also stated that after multiple failed attempts, Bankman-Fried and his employees opened new fake accounts by strictly using the personal identifying information of several individuals who had no ties with Alameda of FTX, to move cryptocurrency from the frozen accounts to the fraudulent accounts they created on the Chinese exchanges.
Furthermore, the Prosecutors revealed before the judge that a grand jury handed up the indictment earlier this week. As of now, Bankman-Fried is charged with a 13-count indictment, of which 12 charges were old ones that he has been facing for the past few years but the remaining one was added for allegedly violating the Foreign Corrupt Practices Act.
The latest bribery allegations represent the seriousness and breadth of the Justice Department’s investigation and it adds to the already existing legal pressures faced by Bankman-Fried.
On top of the string of allegations and charges in the name of Bankman-Fried, the prosecutors also proposed another charge for breach of US campaign finance law. Following the heated situation, Bankman-Fried is preparing to face the consequences and reportedly the trial will be held in October. By now, three of his inner circle members are already convicted of engaging in such illegal activities as well as for other offenses. Among the three, two of them admitted that they supported Bankman-Fried in misleading the investors and lenders to Alameda and the third was Alameda’s former chief executive, Carolyn Ellison who agreed to testify against the mastermind behind all these frauds.
The lawsuit for misleading the inventors and lenders was initially charged by the prosecutors in December, on top of alleging Bankman-Fried for stealing billions of American dollars from the FTX customer funds. In February, the prosecutors came up with a second allegation that claimed he was involved in operating an unlicensed money-transmitting business as well as conspired to commit bank fraud. Although he pleaded not guilty in the initial indictment, several other allegations under his name are yet to be indicted.
On Tuesday, American District Judge Lewis Kaplan approved a fresh bail restriction for the alleged fraudster, as he finally ordered to thwart Bankman-Fried’s access to electronic devices after months of debate over this. Currently, Bankman-Fried is under home detention at his parent’s house located in North Carolina. As per the latest restrictions, Bankman-Fried is not allowed to use his parents’ phones, computers, or any other device except for a phone with no access to the internet, Also, he is not permitted to visit websites except for those that are preapproved. Apart from that, Bankman-Fried is also not allowed to communicate with current or former Alameda employees.
Moreover, his parents’ house is currently under surveillance and a security guard will screen the visits to detect electronic devices before they enter the house.
In the letter submitted before the judge, the prosecutors had clearly stated that the new charge did not alter their opinion on Bankman-Fried’s bail conditions. Reportedly, he will be summoned to the court for a hearing on Thursday.
Until now, the Chinese embassy in Washington, DC, and the Chinese consulate in New York have not responded nor have they made any comment online.