US seeks to recover crypto linked to Sam Bankman-Fried’s alleged China bribe

Quick Take

  • U.S. prosecutors filed a lawsuit to recoup over $17.9 million worth of crypto tied to alleged bribes paid to Chinese officials prior to the FTX collapse.
  • The account consists of Solana, Cardano, Ripple, Internet Computer and Avalanche tokens, according to the filing.

The U.S. Department of Justice has filed a complaint in an attempt to seize over $17.9 million in cryptocurrency in a Binance exchange account, connected to former FTX CEO Sam Bankman-Fried’s alleged bribery to Chinese officials.

The prosecutors link the account to a November 2021 event where Bankman-Fried allegedly directed a $40 million USDT transfer from FTX sister trading company Alameda Research to Chinese officials. It was sent as bribery to release approximately $1 billion in crypto assets frozen on two Chinese exchanges, according to the complaint filed Tuesday.

“After confirmation that the accounts were unfrozen, Bankman-Fried authorized additional payments to be made in the amount of tens of millions of dollars in cryptocurrency in order to complete the bribe,” the filing said.

Prosecutors further claimed that other known and unknown individuals laundered the bribe payment via multiple private wallets to conceal its nature and source, with a portion ultimately channeled into a Binance deposit wallet.   

According to the complaint, the account contains Solana, Cardano, Ripple, Internet Computer and Avalanche cryptocurrencies. It held a total value of around $8.6 million as of Dec. 12, 2023, but is worth about $17.9 million in market rates at the time of writing.

FTX continued to repay creditors

FTX filed for bankruptcy protection in November 2022 amid revelations that Bankman-Fried and other exchange executives mishandled customer funds, among other misdeeds.

Bankman-Fried was found guilty in November last year by a jury in New York of all seven criminal counts of defrauding the customers, lenders and investors of FTX. He was sentenced to 25 years in prison in March 2024.

FTX, under the new leadership of bankruptcy expert John J. Ray III, is working to repay its creditors. Its reorganization plan, which sets out to repay 98% of creditors at least 118% of their claim value in cash, gained court approval in October.

The exchange has also been filing multiple lawsuits against various individuals and entities with an aim to claw back billions of dollars lost in its collapse. The bankrupt exchange recently sued Binance and former CEO Changpeng Zhao for $1.76 billion that it claims to have been transferred fraudulently.


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About Author

Danny Park is an East Asia reporter at The Block writing on topics including Web3 developments and crypto regulations in the region. He was formerly a reporter at Forkast.News, where he actively covered the downfall of Terra-Luna and FTX. Based in Seoul, Danny has previously produced written and video content for media companies in Korea, Hong Kong and China. He holds a Bachelor of Journalism and Business Marketing from the University of Hong Kong.

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