Founder of FTX crypto exchange accused of bribing Chinese officials
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FTX founder Sam Bankman-Fried is accused of paying a $40 million bribe to one or more Chinese officials, transmits The Associated Press, citing the indictment. He transferred money to unfreeze the accounts of his hedge fund.
According to the agency, in November 2021, Bankman-Fried transferred about $40 million in the form of cryptocurrency from the main account of the Alameda Research hedge fund to a private cryptocurrency wallet. After that, the accounts were unfrozen, and Bankman-Fried ordered the transfer of tens of millions more dollars in the form of cryptocurrency.
The investigation accuses the founder of the crypto exchange of conspiring to violate the provisions of the US Foreign Corrupt Practices Act.
The collapse of FTX began with a Coindesk article stating that the majority of Alameda’s assets ($14.6 billion) are FTT tokens, coins issued by its subsidiary. After that, investors began withdrawing money from the exchange and selling its FTT tokens. Reuters later wrote that about $1 billion of funds belonging to clients disappeared from FTX.
The US Securities and Exchange Commission (SEC) charged Bankman-Fried with organizing a scheme to deceive investors. The regulator believes Bahamas-based FTX has raised over $1.8 billion since at least May 2019, including $1.1 billion from about 90 U.S. investors. The businessman promoted FTX to investors as a safe platform for trading cryptoassets, while FTX transferred client funds to its subsidiary crypto hedge fund Alameda Research LLC. Bankman-Fried, the SEC alleges, used pooled FTX client funds in Alameda to make undisclosed venture capital investments, “lavish real estate purchases,” and large political donations.
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