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FTX collapsed in November 2022, revealing extensive mismanagement of customer funds under Bankman-Fried’s leadership. It is considered one of the largest financial frauds in American history.
Key Notes
The DOJ is aiming to seize $17.9 million from a Binance account linked to Sam Bankman-Fried’s alleged $40 million bribery.The alleged bribe was intended to unlock $1 billion in crypto assets frozen on Chinese exchanges.Bankman-Fried reportedly authorized additional crypto payments in the millions after confirmation that the frozen funds were released.The United States Department of Justice (DOJ) is seeking to seize over $17.9 million in cryptocurrency tied to a Binance account. The account is linked to former FTX CEO Sam Bankman-Fried’s alleged $40 million bribery payment to Chinese officials to free around $1 billion in frozen crypto assets on Chinese exchanges.
The DOJ complaint, filed on November 12, describes this account as crucial to Bankman-Fried’s controversial attempt to manipulate regulatory actions.
According to the DOJ’s filing, Bankman-Fried directed a $40 million USDT transfer from FTX’s sister firm, Alameda Research, to a private crypto wallet on November 16, 2021. Following this initial transfer, the frozen funds on Chinese exchanges were reportedly released. The DOJ states that FTX’s former boss authorized further payments of “tens of millions of dollars in cryptocurrency” to finalize the bribe after receiving confirmation that the accounts were unfrozen.
The filing highlighted five deposit accounts associated with the targeted Binance wallet, which it claims were used to conceal the bribery transactions. Authorities detailed that the account was regularly active, with frequent incoming deposits and withdrawals. The account’s five linked wallets reportedly processed “nearly daily” deposits of Bitcoin and stablecoins, converting them into various other cryptocurrencies.
As per the complaint, the wallet currently holds an array of digital assets, including Solana SOL $208.6 24h volatility: 3.2% Market cap: $98.76 B Vol. 24h: $11.87 B , Cardano ADA $0.54 24h volatility: 8.3% Market cap: $19.37 B Vol. 24h: $2.16 B , XRP XRP $0.67 24h volatility: 4.0% Market cap: $38.28 B Vol. 24h: $9.58 B , Internet Computer ICP $8.27 24h volatility: 8.4% Market cap: $3.93 B Vol. 24h: $286.86 M , and Avalanche AVAX $32.42 24h volatility: 7.0% Market cap: $13.20 B Vol. 24h: $1.38 B tokens. As of December 12, 2023, these holdings amounted to $8.6 million but have since appreciated to $17.9 million at the current market price.
Caroline Ellison, former CEO of Alameda Research, disclosed in her testimony that the bribe totaled around $150 million. Her role in FTX’s downfall ultimately led to a two-year prison sentence, as well as a potential liquidation of her remaining assets for the court settlement.
FTX’s Ongoing Efforts to Repay Creditors
FTX collapsed in November 2022, revealing extensive mismanagement of customer funds under Bankman-Fried’s leadership. It is considered one of the largest financial frauds in American history.
Following his arrest, Bankman-Fried was tried and convicted on seven felony counts, receiving a 25-year sentence in March. Six additional charges, including conspiracy to commit bank fraud and foreign bribery, were initially filed but were later dropped. In September, Bankman-Fried’s lawyers filed an appeal, challenging his conviction. The appeal claims that he was denied a fair trial and seeks new proceedings under a different judge.
FTX has undergone substantial restructuring led by John J. Ray III, a renowned bankruptcy expert. Under Ray’s leadership, FTX has developed a reorganization plan aimed at repaying 98% of its creditors, with a minimum recovery rate of 118% per claim. This ambitious plan received court approval in October.
Meanwhile, authorities continue to unravel the financial intricacies of Bankman-Fried’s defunct empire.
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With a background in finance and a passion for innovation, Anisha has been covering the ever-evolving world of crypto for over four years. Her deep understanding of the crypto market have made her a trusted source for analysis and news. Whether it's dissecting the latest trends or decoding whitepapers, Anisha is dedicated to bringing clarity to the world of digital assets.
