Sam Bankman-Fried’s Attempt to Unlock Frozen Funds on Huobi and OKX Revealed in Court
Today, Caroline Ellison, the former head of Alameda Research, testified about how Sam Bankman-Fried, the former CEO of FTX, tried to unlock funds that were frozen on Asian crypto exchanges Huobi and OKX. At the time, Alameda’s accounts on these exchanges held around $1 billion and were frozen due to a Chinese government money laundering investigation involving an Alameda counterparty.
Initially, Alameda attempted to hire a lawyer in China to negotiate with the government but was unsuccessful. As an alternative, they resorted to various trading strategies. One method involved creating multiple accounts on OKX using the identities of Thai prostitutes. The plan was for their main account to lose money while the other accounts made money through imbalanced trades, allowing them to withdraw funds.
The Chinese Bribe
Another employee at Alameda suggested bribing a Chinese official to unfreeze the accounts. Bankman-Fried initially opposed the idea but eventually agreed. According to Ellison, the accounts were eventually unfrozen after Alameda paid a bribe to Chinese government officials.
Bankman-Fried is currently facing seven charges of fraud in this trial. However, even if he is found innocent, he will face a second trial with five additional counts scheduled for March. These charges include bank fraud and foreign bribery conspiracy charges. Prosecutors argue that the alleged bribe paid to a Chinese official violates the Foreign Corrupt Practices Act. Bankman-Fried has pleaded not guilty.
Hot Take: Allegations of Fraud and Bribery Surround Former FTX CEO
In a recent court hearing, details emerged regarding Sam Bankman-Fried’s attempts to unlock frozen funds on Huobi and OKX. Caroline Ellison, the former head of Alameda Research, revealed that various strategies were employed, including creating accounts under the names of Thai prostitutes to manipulate trades. Furthermore, there were discussions about bribing a Chinese official to unfreeze the accounts, which Bankman-Fried eventually agreed to. These allegations add to the seven charges of fraud Bankman-Fried is currently facing. Regardless of the trial outcome, he will face additional charges in a separate trial. The case highlights the potential legal consequences for individuals involved in fraudulent activities within the crypto industry.
Theon Barrett shines as a distinguished crypto analyst, accomplished researcher, and skilled editor, making significant strides in the field of cryptocurrency. With an astute analytical approach, Theon brings clarity to intricate crypto landscapes, offering insights that resonate with a broad audience. His research prowess goes hand in hand with his editorial finesse, allowing him to distill complex information into accessible formats.