March 27, 2024
Testimony: SBF Allegedly Bribed Chinese Officials for Fund Release
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Testimony: SBF Allegedly Bribed Chinese Officials for Fund Release

In her recent courtroom testimony, Caroline Ellison, the former romantic partner of FTX founder Sam “SBF” Bankman-Fried and the former CEO of Alameda Research, made startling claims about SBF’s involvement in bribing Chinese officials to unfreeze funds locked in local exchanges.

According to her testimony on October 11, Ellison stated that there were $1 billion in funds frozen in China, and to gain access to them, Alameda Research paid a substantial $150 million bribe to Chinese government officials.

These frozen funds belonged to Alameda Research and were locked on cryptocurrency exchanges Huobi and OKX following a 2021 money laundering investigation initiated by Chinese authorities.

Ellison further revealed that Bankman-Fried instructed her and other FTX employees to delete all relevant messages sent via the encrypted messaging app Signal. Before resorting to bribery, they had initially attempted to engage a local lawyer in China to aid in negotiations with the government.

When legal efforts failed, Ellison claimed that Bankman-Fried made unsuccessful attempts to use “other people’s accounts” to access the funds. These included accounts belonging to Thai sex workers. She disclosed, “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.” Ellison believed that the accounts were ultimately unfrozen after Alameda paid the bribe.

A witness in the courtroom reported on X (formerly Twitter) that Ellison is scheduled for a cross-examination from SBF’s lawyer, Mark Cohen, on October 12. SBF is currently facing 13 charges, with the initial seven charges of fraud being addressed in the ongoing trial that began on October 3. Notably, these charges do not include allegations of bribing Chinese officials. A second trial scheduled for March 2024 will encompass six additional charges, including bank fraud and foreign bribery conspiracy, to which Bankman-Fried has pleaded not guilty.

Image by rawpixel.com on Freepik

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