FTX Founder Accused of $150M Bribery to Free Locked Chinese Funds: Ex-CEO Testifies
Summary:
Caroline Ellison, former CEO of Alameda Research, stated that founder of FTX, Sam "SBF" Bankman-Fried, bribed Chinese officials with $150 million to access $1 billion of funds locked in Chinese exchanges. The funds were tied due to a 2021 money laundering investigation, and efforts for their release even involved setting up accounts in the name of Thai sex workers. Bankman-Fried is currently under trial for 13 charges, including fraud and foreign bribery, segregated into two trials.
Caroline Ellison, ex-partner of FTX founder Sam "SBF" Bankman-Fried and ex-CEO of Alameda Research, has stated in a court hearing that SBF paid hefty bribes to Chinese officials to free up funds stuck in local exchanges. During her deposition on October 11, Ellison asserted that $1 billion in funds were seized in China, and Alameda unlocked these by paying a $150 million bribe to Chinese bureaucrats.
The money, owned by Alameda Research, was tied up at the cryptocurrency exchanges Huobi and OKX due to a 2021 scrutiny on money laundering initiated by the Chinese government. Ellison confirmed that Bankman-Fried instructed her and other FTX staffers to erase pertinent messages sent through the encrypted messaging app Signal. Nevertheless, before resorting to the bribe, Ellison noted that they attempted to enlist a local attorney in China to facilitate government negotiations. After failing to get help from attorneys, it was suggested by Ellison that Bankman-Fried tried to use "other people's accounts” - a venture that was in vain. This even involved people recognized to be Thai sex workers. Ellison stated, “We created multiple accounts on OKX using the identities of different individuals who I suspect were Thai sex workers. We aimed to orchestrate our main account to incur losses while these other accounts gained profits, by inducing highly asymmetric trades between the two accounts so that the other accounts could earn and withdraw money.”
In response to the query regarding how these accounts were ultimately unfrozen, Ellison believed that the bribe paid by Alameda led to the unlocking of the accounts. A post on platform X (formerly Twitter), made by a courtroom witness, suggested that Ellison is scheduled to return on October 12 for a counter-questioning from SBF’s legal representative, Mark Cohen.
Altogether, SBF is up against 13 charges. The first seven accusations of fraud are being addressed in his ongoing trial that kicked off on October 3, but these do not encapsulate charges of bribing Chinese officials. However, a subsequent trial fixed for March 2024 includes an extra five charges covering bank fraud and international bribery conspiracy. Bankman-Fried has uniformly rebuffed all the charges leveled against him. Reporters from Cointelegraph are based in New York to report on the trial. For fresh updates on this ongoing narrative, stay tuned here.
Published At
10/12/2023 9:27:28 AM
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