DOJ Seeks to Seize $17.9 Million in Cryptocurrency

The U.S. Department of Justice has filed a complaint to seize over $17.9 million in cryptocurrency linked to former FTX CEO Sam Bankman-Fried, related to alleged bribery of Chinese officials.

The prosecutors connect the account to a November 2021 incident where Bankman-Fried supposedly directed a $40 million USDT transfer from FTX's sister trading company, Alameda Research, as a bribe to unfreeze approximately $1 billion in crypto assets on two Chinese exchanges. The complaint detailed that after confirmation of unfreezing, Bankman-Fried approved additional cryptocurrency payments totaling tens of millions to complete the bribe.

Prosecutors also alleged that known and unknown individuals laundered the bribery payment through various private wallets to hide its origin, with part of it eventually deposited into a Binance wallet.

The account is said to contain cryptocurrencies including Solana, Cardano, Ripple, Internet Computer, and Avalanche. It had a reported value of around $8.6 million as of December 12, 2023, but is estimated to be worth about $17.9 million at current market rates.

FTX's Bankruptcy and Creditor Repayment

FTX declared bankruptcy in November 2022 amid revelations of mismanagement of customer funds by Bankman-Fried and other executives. In November last year, a jury in New York found Bankman-Fried guilty on all seven criminal counts related to defrauding customers, being sentenced to 25 years in prison in March 2024.

Under the leadership of bankruptcy expert John J. Ray III, FTX is working to repay its creditors through a reorganization plan that aims to return at least 118% of claims to 98% of creditors, which received court approval in October. The exchange is also pursuing multiple lawsuits against various individuals and entities to recover billions lost in its collapse, including a recent lawsuit targeting Binance and former CEO Changpeng Zhao for $1.76 billion in allegedly fraudulent transfers.