Sam Bankman-Fried Paid Over $40 Million To Bribe Chinese Officials To Unfreeze Accounts

The U.S. Department of Justice (DOJ) isn't quite done with FTX CEO Sam Bankman-Fried, and they are now asking the courts for permission to recoup the crypto allegedly linked to the bribes paid to Chinese officials by Bankman-Fried.

Prosecutors alleged that the Binance wallet contains approximately $8.6 million worth of crypto as of 12 December 2023, but the value of the wallet has skyrockered to about $18.5 million due to the uptick across the market.

Bankman-Fried's deal with Chinese offiical

It was believed that Chinese law enforcement froze two of Almeda Research's accounts on cryptocurrency exchanges Huobi and OKX following a 2021 money laundering probe opened by Chinese authorities.

Caroline Ellison revealed that the frozen accounts held a total of $1 billion in digital currencies like Solana(SOL), Cardano(ADA), Ripple(XRP), Internet Computer(IC) and Avalanche(AVAX).

On 16 November 2021, the Chinese official received $40 million in Tether from Bankman-Fried, and Alameda's accounts were unfrozen shortly after.

The bribe was reportedly paid in two installments; $28 million in USDT before its accounts were unfrozen and another $12 million in USDT after the accounts were confirmed to be unfrozen.

US authorities said the account they wanted to access to had five deposit accounts linked to it, which were used to conceal and disguise what they alleged was the bribe paid by Bankman-Fried.

Prosecutors also note that the account had a regular flow of incoming deposits and outgoing withdrawals, while the five wallets received nearly daily deposits of Bitcoin and stablecoins, which were then converted into other cryptocurrencies.

FTX’s Bankruptcy and Repayment Efforts

Following revelations of mismanaged customer funds, FTX filed for bankruptcy protection in November 2022.

Bankman-Fried was found guilty in November 2023 of all seven charges related to defrauding FTX’s customers, lenders, and investors and was sentenced to 25 years in prison in March 2024.

Under the leadership of restructuring expert John J. Ray III, FTX, is actively working to repay its creditors. The exchange’s court-approved reorganization plan, which promises to pay back 98% of creditors at 118% of their claim value in cash, was greenlit in October.

Additionally, FTX is pursuing lawsuits against multiple parties, including a recent $1.76 billion claim against Binance and former CEO Changpeng Zhao, to recover billions lost during its collapse.