Federal prosecutors tacked on a 13th criminal charge against Sam Bankman-Fried, accusing the FTX co-founder of bribing “one or more” Chinese government officials with $40 million worth of cryptocurrency.
In the indictment, prosecutors allege that Bankman-Fried sought to pay off Chinese officials in an effort to unfreeze accounts belonging to his hedge fund, Alameda Research. The accounts, which the Chinese government had frozen , held more than $1 billion worth of digital assets, prosecutors say.
The accounts were released after the payment was transferred in from Alameda’s main trading account to a private cryptocurrency wallet, according to the indictment.
The new indictment was unsealed by the Southern District Court of New York on Tuesday. Bankman-Fried, who is out on a $250 million bond, has already pleaded not guilty to eight criminal counts of fraud and conspiracy, and has not yet been arraigned on five others.
A bail hearing was scheduled for Thursday at 11 a.m. ET.
A spokesman for Bankman-Fried declined to comment.
Bail terms changed
Also on Tuesday, Judge Lewis A. Kaplan approved new bail conditions for Bankman-Fried that will severely restrict his internet access following concerns about his past use of messaging apps and a virtual private network.
Under the new terms, Bankman-Fried will be allowed access to two electronic devices — a closely monitored laptop and a phone that can only be used for voice calls and texts. He is “otherwise prohibited from using any other cellphones, tablets, computers, videogames (including video game platforms and hardware) that permit chat or voicecommunication, or “smart” devices with Internet access,” Kaplan wrote.
The laptop is largely under his legal team’s control, and Bankman-Fried will be restricted to a handful of news websites, and services such as Netflix, Doordash, and Gmail.
Bankman-Fried will be permitted to use a VPN only for the purpose of accessing a database to help prepare his defense. When using the VPN, lawyers will have to send someone from their firm to supervise him. That person will “remain with Mr. Bankman-Fried while he uses the laptop, and take back the laptop and remove it from the residence when he is finished,” Kaplan wrote.
FTX’s undoing
The charges against Bankman-Fried stem from what prosecutors have characterized as one of the biggest financial frauds in US history. They say that Bankman-Fried orchestrated a massive scheme, stealing deposits from his cryptocurrency exchange FTX, to finance risky bets at his hedge fund, funnel contributions to American politicians and underwrite a luxury lifestyle for himself and his employees in the Bahamas.
FTX had been one of the buzziest and biggest platforms for trading digital assets before it collapsed into bankruptcy in November.
The 31-year-old Bankman-Fried has previously acknowledged mishandling his business but has denied committing fraud.
Three of Bankman-Fried’s former business partners — Gary Wang, Caroline Ellison and Nishad Singh — have pleaded guilty to numerous charges and are cooperating with investigators.
If convicted on all counts, he could face more than 155 years in prison. A trial has been scheduled for October.
Bankman-Fried is under house arrest at his parents’ home in Palo Alto, California, where his movements are heavily restricted.
— CNN’s Kara Scannell contributed reporting.
