U.S. prosecutors are seeking a court’s authorization to seize cryptocurrencies that they allege are connected to bribes paid to Chinese officials by Sam Bankman-Fried, a co-founder of the collapsed crypto exchange FTX. In a legal filing submitted to a New York District Court, prosecutors identified a Binance account that originally held approximately $8.6 million but surged to about $18.5 million due to market fluctuations. This account is believed to have been utilized for laundering funds related to bribery activities prior to FTX’s downfall in late 2022.
The court documents reveal that Chinese authorities froze two accounts belonging to Alameda Research, another entity associated with Bankman-Fried, which collectively held $1 billion in cryptocurrencies in 2021. Subsequently, it is alleged that a $40 million bribe in Tether was transferred to a private wallet on November 16, 2021. Following the unfreezing of Alameda’s accounts, substantial additional cryptocurrency payments were allegedly authorized to finalize the bribe.
Prosecutors indicated that the account in question was created on November 9, 2023, linking five additional deposit accounts that purportedly concealed the proceeds of the bribes. This account has exhibited a consistent pattern of deposits and withdrawals, involving nearly daily inputs of Bitcoin and stablecoins that were subsequently converted into a variety of other cryptocurrencies.
Bankman-Fried’s former Alameda CEO has testified that the total amount of the bribe exceeded $150 million. On December 21, 2023, a judge ordered the seizure of the account during Bankman-Fried’s trial, in which he faced multiple felony charges and was ultimately sentenced to 25 years in prison. Although he initially faced more serious allegations, including bank fraud and conspiracy to bribe foreign officials, those charges were later dismissed. In September, Bankman-Fried’s legal team filed an appeal contesting the fairness of the trial proceedings.
