US Says Samuel Bankman-Fried Violated FCPA in Bribe to Chinese Officials

The U.S. this week charged FTX founder Sam Bankman-Fried with violating the Foreign Corrupt Practices Act's anti-bribery provisions. Filing a superseding indictment at the U.S. District Court for the Southern District of New York March 27, the U.S. Attorney's Office said Bankman-Fried and others paid around $40 million in cryptocurrency to one or more Chinese government officials to "induce them" to unfreeze certain cryptocurrency trading accounts held by one of Bankman-Fried's companies, Alameda Research (U.S. v. Samuel Bankman-Fried, S.D.N.Y. # 22-00673).

Chinese law enforcement froze the approximately $1 billion accounts, which were held on two of China's largest cryptocurrency exchanges, in early 2021 due to an ongoing investigation into Alameda. Bankman-Fried undertook numerous attempts to get the accounts unfrozen, eventually directing others to make the $40 million bribe to Chinese officials, the indictment alleges.

The U.S. said this violated the FCPA, and added the charge to the case against the former FTX head, which now includes 13 criminal counts. The FCPA charge increased the potential maximum prison time Bankman-Fried faces.