FTX Founder Accused of $40M Bribe to Chinese Authorities

Key Takeaways

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  Blockchain investigator ZachXBT has reignited scrutiny over a $40 million transfer allegedly concealed by Sam Bankman-Fried.
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  Bankman-Fried's legal team is currently appealing his 2023 conviction, arguing for a new trial due to alleged bias.
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  This transaction is reportedly linked to efforts to unfreeze $1 billion in assets held on Chinese exchange accounts.

Legal Challenge and Renewed Accusations

A significant accusation regarding a $40 million transfer, allegedly concealed by Sam Bankman-Fried, has resurfaced just as the former crypto billionaire's legal team presented arguments for a new trial before a New York appeals court. This development comes after his 2023 conviction.

The $40 million transaction has previously drawn attention. On-chain investigations in 2023 indicated that funds associated with FTX and its trading firm, Alameda Research, might have been rerouted through multiple wallets before reaching Chinese entities. These claims are now being highlighted again as Bankman-Fried's defense seeks to overturn his conviction.

Defense Argues for a Biased Trial

During a hearing on Tuesday, attorney Alexandra Shapiro contended that Sam Bankman-Fried did not receive a fair trial. Addressing the three-judge panel at the Second Circuit Court of Appeals, Shapiro accused presiding judge Lewis Kaplan of exhibiting bias and unfairly favoring the prosecution. She argued that the case against the 33-year-old entrepreneur was built more on public outrage than concrete evidence and requested a retrial presided over by a different judge.

The defense asserts that the jury's rapid verdict, delivered after less than five hours of deliberation, indicated prejudice rather than a just outcome. They maintain that the portrayal of Bankman-Fried as intentionally deceitful disregarded the chaotic circumstances surrounding FTX's eventual collapse.

Blockchain Investigator Highlights Transaction

The renewed focus on the transaction began when Bankman-Fried's official X account posted a comment on statements made by FTX's current CEO, John J. Ray III. In this post, Bankman-Fried noted that FTX debtors were still withholding funds owed to Chinese creditors.

In response, ZachXBT, a blockchain investigator, directly questioned Bankman-Fried via X, asking, "Riddle me about the $40M transfer to Chinese authorities you hid from the public?" He included a link to a 2023 post that traced one of FTX's wallets to a suspicious transfer, aligning with allegations presented in U.S. court filings.

Further supporting these claims, an analyst known as DefiSquared had previously tracked numerous wallet interactions involving addresses linked to FTX. Their investigation revealed a pattern where wrapped Bitcoin was converted into USDT via Gate.io and connected to a $40 million transaction in November 2021. This amount matches the sum federal prosecutors alleged was paid to unfreeze Alameda's Chinese accounts.

Prosecution's Allegation: A Direct Bribe

According to the indictment, Bankman-Fried and his associates spent several months attempting to regain access to approximately $1 billion in cryptocurrency that had been frozen on Chinese exchanges. After legal appeals and direct outreach proved unsuccessful, prosecutors alleged that the FTX founder "agreed to and directed" a multi-million dollar payment to Chinese officials as a means to unfreeze the assets.

This accusation was a significant component of a broader fraud case that ultimately led to Bankman-Fried's conviction on all seven counts, including wire fraud and conspiracy. The jury sided with the prosecution after a brief deliberation, marking one of the swiftest verdicts in a crypto trial of comparable magnitude.

Broader Implications of the Transaction

While the legal appeals process unfolds, the alleged $40 million payment continues to be a contentious element in the FTX saga. For many within the cryptocurrency community, the re-emergence of blockchain evidence raises significant questions about the extent to which FTX's leadership went to secure access to their substantial funds.

Regardless of the outcome of the appeal, the renewed discussion surrounding this transaction ensures that the collapse of FTX and the lingering mysteries associated with it will remain a prominent topic.