DOJ Moves to Seize $17.9 Million in Cryptocurrency from Binance Account
The United States Department of Justice (DOJ) is seeking to seize over $17.9 million in cryptocurrency linked to a Binance account associated with former FTX CEO Sam Bankman-Fried. This account is reportedly tied to an alleged $40 million bribery payment made to Chinese officials to unfreeze approximately $1 billion in crypto assets on Chinese exchanges.
The DOJ’s complaint, filed on November 12, indicates that the account played a significant role in Bankman-Fried’s attempts to manipulate regulatory actions.
According to the filing, on November 16, 2021, Bankman-Fried directed a $40 million USDT transfer from FTX’s sister firm, Alameda Research, to a private crypto wallet. Following this transfer, funds on Chinese exchanges were reportedly released. The DOJ claims that Bankman-Fried authorized additional payments of “tens of millions of dollars in cryptocurrency” to finalize the bribe after confirmation that the accounts were unfrozen.
The complaint identifies five deposit accounts linked to the targeted Binance wallet, which allegedly concealed the bribery transactions. These accounts exhibited frequent activity, processing nearly daily deposits and withdrawals of Bitcoin and stablecoins, which were converted into various cryptocurrencies.
The wallet currently holds multiple digital assets, including Solana, Cardano, XRP, Internet Computer, and Avalanche. As of December 12, 2023, these holdings were valued at $8.6 million but have appreciated to $17.9 million at current market prices.
Caroline Ellison, former CEO of Alameda Research, testified that the bribe totaled approximately $150 million. Her involvement in FTX’s collapse resulted in a two-year prison sentence and potential liquidation of her remaining assets for court settlement.
FTX’s Ongoing Efforts to Repay Creditors
FTX collapsed in November 2022 due to extensive mismanagement of customer funds under Bankman-Fried’s leadership, marking one of the largest financial frauds in American history.
Following his arrest, Bankman-Fried was convicted on seven felony counts and sentenced to 25 years in March. Six additional charges, including conspiracy to commit bank fraud and foreign bribery, were initially filed but later dropped. In September, Bankman-Fried’s lawyers filed an appeal claiming he was denied a fair trial and seeking new proceedings under a different judge.
FTX has undergone significant restructuring under bankruptcy expert John J. Ray III, who has developed a reorganization plan aimed at repaying 98% of its creditors, with a minimum recovery rate of 118% per claim. This plan received court approval in October.
Authorities continue to investigate the financial complexities of Bankman-Fried’s defunct empire.