BIT Mining Settles Bribery Investigations

BIT Mining has agreed to pay a $10 million total penalty to resolve investigations by the U.S. Department of Justice (DOJ) and the U.S. Securities and Exchange Commission (SEC) regarding its alleged bribery of Japanese officials.

According to court documents, between 2017 and 2019, BIT Mining (formerly 500.com) admitted to paying $1.9 million in bribes to secure a casino resort bid, which it ultimately did not win. BIT Mining entered into a three-year deferred prosecution agreement over one count of conspiracy to violate the anti-bribery provisions of the Foreign Corrupt Practices Act (FCPA) and one count of violating the FCPA's books and records provisions. The DOJ also charged the company’s former CEO, Zhengming Pan, with violations of the FCPA.

500.com was an online sports lottery service provider in Shenzhen, China, trading on the New York Stock Exchange as "WBAI." The company shifted focus to cryptocurrency mining in April 2021, rebranding as BIT Mining and changing its ticker symbol to "BTCM."

Settlement Details

BIT Mining acknowledged that the appropriate criminal penalty under U.S. sentencing guidelines was $54 million, but due to its financial condition, the DOJ agreed to the $10 million penalty. Additionally, the firm agreed to pay a $4 million civil penalty to settle similar SEC charges, with this amount credited against the total penalty. The SEC estimated that the bribery scheme involved approximately $2.5 million in cash bribes, entertainment, and extravagant trips.

“BIT Mining, under then-CEO Zhengming Pan, agreed to pay nearly $2 million in bribes to officials to win a lucrative resort and casino contract in Japan,” stated DOJ Criminal Division head Nicole M. Argentieri. “Today's resolution and Pan's charges demonstrate our commitment to holding corporations and individuals accountable.”

“Investors must trust that public companies' operations reflect merit and legitimate factors. Bribery and corruption undermine this trust,” added Charles E. Cain, Chief of the SEC's FCPA Unit, emphasizing that 500.com’s inadequate controls allowed for this bribery scheme.

BIT Mining received credit for cooperating with the DOJ and FBI investigation, which included assistance from Japanese authorities. The company also agreed to enhance its compliance programs and to report remediation efforts to the DOJ during the three-year term of the DPA.