U.S. Authorities Push to Seize Millions in Crypto Linked to Alleged Bribery Scheme by FTX Co-Founder

United States prosecutors are pushing to seize nearly $18.5 million worth of cryptocurrencies linked to alleged bribes paid by FTX co-founder Sam Bankman-Fried to Chinese officials. 

A November 12 court filing in the New York District Court alleges that the funds, currently in a Binance account, were initially valued at $8.6 million in December 2023 but surged due to recent market gains.

The lawsuit details events from 2021 when Chinese law enforcement allegedly froze two accounts belonging to Alameda Research on local exchanges, which collectively held $1 billion in cryptocurrency. Prosecutors allege that on November 16, 2021, Bankman-Fried transferred $40 million in Tether (USDT) to a private wallet as part of a bribe to unfreeze Alameda’s accounts. After the accounts were successfully released, additional cryptocurrency payments totalling tens of millions of dollars were allegedly transferred into the account. 

Former Alameda CEO Caroline Ellison testified that the total bribe amount was approximately $150 million.

According to the court filings, the targeted Binance account has five linked deposit accounts used to “conceal or disguise” transactions connected to the bribe. The accounts reportedly show a “steady flow” of deposits and withdrawals, with nearly daily deposits of Bitcoin and stablecoins later converted to other digital assets. 

The filing indicates that the account holds several significant assets, including Solana (SOL), Cardano (ADA), XRP, Internet Computer (IC), and Avalanche (AVAX).

Meanwhile, the FTX bankruptcy estate recently filed a $1.8 billion lawsuit against Binance and its former CEO, Changpeng “CZ” Zhao, as part of its efforts to recover assets. The complaint, submitted on November 10, alleges that Binance executives received $1.76 billion in a fraudulent transfer related to a repurchase deal from July 2021. It argued that the stock buyback from Binance was funded with misappropriated FTX and Alameda Research assets, including FTX Token (FTT), Binance’s BNB, and Binance USD (BUSD).

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