Saturday, June 22, 2024

SBF bribed Chinese officials for $150M to unfreeze funds

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Caroline Ellison, the former romantic partner of embattled FTX founder Sam “SBF” Bankman-Fried and the former CEO of Alameda Research, has claimed in her courtroom testimony that SBF bribed Chinese officials for millions of dollars to unfreeze funds locked in local exchanges. 

In her Oct. 11 testimony, Ellison said there was $1 billion in funds locked up in China and that to access them, Alameda paid a $150 million bribe to Chinese government officials.

The funds, which belonged to Alameda Research, were frozen on the cryptocurrency exchanges Huobi and OKX following a 2021 money laundering probe opened by Chinese authorities.

Ellison testified that Bankman-Fried ordered her and other FTX employees to delete all related messages sent via the encrypted messaging app Signal.

However, before bribing Chinese officials, Ellison said they attempted to hire a local lawyer in China who could help with negotiations with the government.

After attempts with lawyers were unsuccessful, Ellison claimed that Bankman-Fried attempted to use wallets of “other people’s accounts” to unsuccessfully access the funds. This included what turned out to be Thai sex workers.

Ellison said, “On OKX, we made several accounts using the IDs of different people who I believe were Thai prostitutes, and we tried to basically have our main account lose money and have those other accounts make money, so do very imbalanced trades between the two accounts so those other accounts would be able to make money and withdraw it.”

Related: Sam Bankman-Fried aspired to become US president, says Caroline Ellison

When questioned how the accounts were ultimately unfrozen,, Ellison said she thought they were unfrozen after Alameda paid the bribe.

According to a post on X (formerly Twitter) from a witness in attendance in the courtroom, Ellison has to return on Oct. 12 for a cross-examination from SBF’s lawyer Mark Cohen.

In total, SBF faces 13 charges. The first seven charges of fraud are being heard in his current trial which began on Oct. 3 and does not include charges of bribing Chinese officials.

However, in a second trial scheduled in March 2024, he is facing an additional five charges which include bank fraud and foreign bribery conspiracy charges. Bankman-Fried has pleaded not guilty to all charges pressed against him.

Cointelegraph reporters are on the ground in New York covering the trial. As the saga unfolds, check here for the latest updates.

Magazine: SBF trial underway, Mashinsky trial set, Binance’s market share shrinks: Hodler’s Digest, Oct. 1–7