- DOJ seizes $16 million in crypto tied to bribery orchestrated by FTX former CEO SBF.
- Authorities uncovered a complex Web of crypto transactions: eventually identifying a Binance deposit wallet as the final destination.
- The bankrupt exchange has filed a lawsuit against Binance, alleging fraudulent acquisition of funds and conspiracy with SBF.
The FTX scandal deepened as the U.S. Department of Justice (DOJ) commenced legal actions to seize roughly $16 million worth of cryptocurrency held in a Binance account. The assets are part of a bribery scheme allegedly led by former FTX CEO Sam Bankman-Fried (SBF).
Court documents revealed that SBF authorized a transfer of 40 million USDT from an Alameda Research wallet in November 2021. The funds were intended to bribe Chinese officials to unfreeze billions of dollars worth of crypto assets held on two Chinese exchanges.
Authorities have unearthed the funds by navigating a complex web of private wallets, eventually tracking down a Binance deposit wallet as the final destination. The department claims the account exhibited suspicious activity, including frequent stablecoin and Bitcoin deposits that were rapidly converted into other cryptocurrencies through over-the-counter trades. Sources also stated FTX’s former chief technology officer Gary Wang has been working closely with the DOJ to build tools to detect crypto crime, per his sentencing memorandum.
While the discovery of these assets is commendable, the recovery process might pose a complex challenge for law enforcement, particularly considering the sheer increase in their value since the initial transfers. This case underscores the challenges faced by authorities in tracking and recovering cryptocurrencies involved in illicit activities.
FTX Sues Binance for $1.8 Billion in Fraudulent Deal
The development comes after the exchange is in the midst of a legal battle with Binance Holdings Limited and its former CEO, Changpeng Zhao. The bankrupt platform sued Binance to acquire $1.8 billion back. As reported earlier, the complaint was filed in the Delaware bankruptcy court and alleges that Binance and Zhao conspired with the exchange’s former CEO, Bankman-Fried, to fraudulently acquire funds in a share buyback scheme in 2021.
The lawsuit also claimed that Binance and its executives acquired roughly 20% of the platform’s international operations and 18.4% of FTX’s US operations in July 2021. This was part of a share buyback agreement that saw Bankman-Fried pay Binance using FTT tokens of FTX and BNB and BUSD of Binance and the deal was worth $1.76 billion.
As the legal battle unfolds, it remains to be seen how Binance will respond to the DOJ’s claims and whether the seized funds will be returned to the victims of SBF’s fraudulent activities.
