A newly unsealed superseding indictment signed by U.S. Attorney Damian Williams of the Southern District of New York and Assistant Attorney General Kenneth Polite alleges that Sam Bankman-Fried, the founder and former CEO of the now bankrupt cryptocurrency exchange FTX, bribed at least one Chinese government official with tens of millions of dollars in an attempt to persuade the Chinese government to unfreeze accounts associated with Alameda Research, FTX's hedge fund sister company. This new charge brings the total number of Bankman-Fried's criminal charges up to 13.
"The defendant authorized and directed a bribe of at least $40 million to one or more Chinese government officials," the indictment states. "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."
Bankman-Fried and others "sought to regain access to the assets to fund additional Alameda trading activity," in order to "assist Bankman-Fried and Alameda in obtaining and retaining business," the indictment states.
Bankman-Fried pleaded not guilty to the new bribery charge, as well as four other federal criminal charges in New York on March 30, CNN Business reported. Earlier this year, Bankman-Fried pleaded not guilty to the eight other criminal charges he faces. He could face more than 150 years in prison if convicted on all counts.
Bankman-Fried's initial not guilty plea came after two of his former top executives, FTX co-founder Gary Wang and former Alameda Research CEO Caroline Ellison, pleaded guilty and are reportedly cooperating with prosecutors and the U.S. Securities and Exchange Commission (SEC), NPR reported. One securities fraud expert at UCA Law said that Wang's and Ellison's plea deals may have prompted Bankman-Fried's not guilty plea. James Park said, "Sam Bankman-Fried was probably not offered a deal because he is likely the main instigator of the fraud, and there is no one higher up that he can testify against. He thus had no incentive to plead guilty, and will attempt to leverage his ability to take the case to trial to get a more favorable sentence than is being offered at the start of the case."
Genevieve Roch-Decter, CEO of financial media company Grit Capital, said on Fox Business that she found it "shocking" that Bankman-Fried is pleading not guilty. "There is overwhelming evidence against this, and he's incriminated himself over and over again, especially on his apology tour that he did, and his girlfriend, or former girlfriend, throwing him under the bus for her own plea deal – it's shocking," Roch-Decter said.
When Ellison, who has been romantically linked to Bankman-Fried, appeared in court in December to plead guilty to seven criminal charges, she told the judge that she and Bankman-Fried had knowingly misled FTX investors and customers and conspired to steal billions of dollars, Forbes reported. Ellison reportedly said in court, “I knew that it was wrong."
In the wake of FTX's collapse, Bankman-Fried engaged in a series of interviews, including with the New York Times and ABC’s "Good Morning America," despite recommendations from his legal team. In an opinion piece for CoinDesk, David Morris wrote that Bankman-Fried "wound up directly implicating himself in a variety of ways" during his "media tour." Morris wrote, "SBF has repeatedly seemed to admit to, or come close to admitting to, specific corrupt practices at FTX and Alameda. Some of these were previously either contained only in dry legal documents or just merely suspected. These statements – in his own words, and on the public record – could prove extremely harmful to him in a courtroom." During these interviews, Bankman-Fried "effectively admitted" to comingling FTX and Alameda funds, and in a Twitter Space he "seemed to admit" that when FTX customers purchased Bitcoin, FTX did not actually purchase and hold the Bitcoin.
The November collapse of FTX resulted in billions of missing funds owed to its creditors, NerdWallet reported. The collapse also led to the demise of multiple other crypto companies that had exposure to FTX and shook confidence in the industry.
Bankman-Fried's trial is set to begin in early October. He was extradited from the Bahamas on Dec. 21, and on Dec. 22, he posted a $250 million bail and has since been residing with his parents in California, according to NPR.
A superseding indictment contains a new charge filed against a defendant after the initial indictment.
