FTX founder Sam Bankman-Fried (SBF) has been accused of paying a $40 million bribe to Chinese officials.
SBF allegedly bribed one or more Chinese government officials in an effort to regain access to accounts frozen by the country's law enforcement.
The accounts in question were tied to FTX's sister firm Alameda Research and held over $1 billion in cryptocurrency.
SBF allegedly ordered the $40 million crypto payment to a private wallet from Alameda's main trading account after his lobbying to lift the freeze had failed.
Tens of millions of dollars worth of additional cryptocurrency was authorized by SBF to "complete" the bribe in November 2021.
SBF now faces a 13-count indictment over FTX's collapse, and is expected to be arraigned on the new indictment on Thursday before U.S. District Judge Lewis Kaplan in Manhattan federal court.
A person familiar reportedly said SBF plans to plead not guilty. Prosecutors had also accused SBF of stealing billions from customers to fuel and cover losses at Alameda Research, to which he also pleaded not guilty.
Last week, FTX reached a settlement with Bahamas-based hedge fund Modulo and proposed to sell its stake in Mysten Labs, as its recovery team continues its mission to recover funds.
Read more: FTX Adds Half a Billion Dollars to Creditor Asset Pool
The bulk of the haul, or US$460 million, is coming from Bahamas-based Modulo Capital, which has agreed to return US$404 million in cash that FTX and Alameda staked its hedge fund operations with, as well as release its own claim to US$56 million of assets still locked up on the dormant FTX's crypto exchange, according to a filing in U.S. bankruptcy court in Delaware.
In return, the bankruptcy team will not take any further actions against Modulo’s management.
FTX Contagion & Regulation
Earlier this month, Silvergate became the first US bank casualty of the FTX fallout. Silvergate, which specialised in cryptocurrencies, voluntarily dissolved due to losses sustained from the sudden closure of crypto exchange FTX.
Read more: Silvergate Becomes First US Bank Casualty of FTX Collapse
The Taiwanese were reportedly one of the largest users of the FTX exchange per capita. Users were particularly drawn to FTX's high interest rates compared to local banks.
When FTX collapsed in November 2022, 950 users in Taiwan had $150 million worth of digital assets stored in the exchange. Four of the unnamed individuals had losses over $5 million each.
As a result, Taiwan is looking to adopt special crypto legislation as a result of FTX's collapse.
Read more: FTX Collapse Triggers Taiwan Crypto Regulation
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