US DOJ lawsuit targets $16M in Binance crypto linked to SBF’s bribery and laundering claims

The US Department of Justice (DOJ) wants to seize about $16 million of crypto in a Binance account. In a civil forfeiture lawsuit filed before the US District Court for the Southern District of New York, the DOJ claims its lawsuit follows a year of federal agencies’ investigation into Sam Bankman-Fried’s (SBF) activities.

According to the lawsuit, the funds are allegedly from SBF’s attempts to bribe Chinese officials in 2021 to unfreeze about $1 billion worth of crypto assets belonging to Alameda locked in two Chinese exchanges. At the time, the disgraced CEO allegedly directed the transfer of 40 million USDT from an Alameda Research wallet to a private wallet as an initial payment to the Chinese officials, leading to the unfreezing of the Alameda funds.

It appears that the recipients attempted to launder the bribery proceeds through various exchanges and addresses between 2021 and 2023, but investigators identified the suspicious transactions. Some funds ended up in the Binance account and are now central to this forfeiture proceedings.

The account, reportedly created in November 2023, contained several altcoins, including Solana SOL, Cardano ADA, Ripple XRP, Avalanche AVAX, and Internet Computer Protocol (ICP), with SOL accounting for most of the funds.

Authorities are now seeking forfeiture of the funds, noting that they are property involved in a money laundering or attempted money laundering transaction. They further noted that the Grand Jury indicted SBF for conspiracy to violate the anti-bribery provisions. Interestingly, while indicted, the DOJ never charged him with these allegations after separating them from the main trial.

Two years after FTX collapse, the lawsuits keep coming

The DOJ proceeding is the latest in the series of lawsuits related to the collapse of the FTX exchange over the past few weeks. While SBF is serving a 25-year prison sentence and most of the former executives have been convicted and sentenced, creditors continue to wait for their funds as efforts to recover funds continue.

The new administrators of the bankrupt FTX exchange have been particularly busy with legal proceedings intended to claw back funds allegedly belonging to creditors that the former executives mismanaged. Over the past two weeks, the FTX estate has filed over 30 lawsuits targeting individuals, non-profits, and other entities that received funding, whether as investments or donations, from SBF and other FTX executives. These include several political action committees (PACs) and some startups.

In one of the lawsuits, FTX sued former White House communications director Anthony Scaramucci and his hedge fund SkyBridge Capital for $67 million that SBF invested in SkyBridge. The FTX Venture arm announced in September 2022, less than two months before the exchange would collapse that it would acquire a 30% stake in SkyBridge.

Meanwhile, FTX has also sued Binance and its former CEO Changpeng Zhao for $1.8 billion, which it claimed were funds transferred to the exchange by SBF for fraudulent share repurchase. They claim that SBF repurchased the shares when Alameda and FTX were already insolvent, and Zhao deliberately posted maliciously to bring down a competitor. Zhao’s tweet about selling $529 million FTT was the catalyst for the withdrawals that led to the collapse of FTX.

Bankman-Fried to get a movie

With the ongoing legal proceedings and victims waiting for their refunds, popular independent studio A24 is reportedly working with Apple to produce a movie based on SBF. The film will be based on Michael Lewis’s book Going Infinite: The Rise and Fall of a New Tycoon.

Lewis, who also authored The Big Short about the 2008 financial implosion, had been working on the book before FTX collapsed. The book detailed all SBF rises and falls, including his conviction. However, there is no official information yet on when production will start or who will star in the film.