DOJ Seeks Seizure of $16 Million in FTX-Linked Crypto Following Year-Long Probe

From decrypt by Vince Dioquino

U.S. Department of Justice. Image: Shutterstock

The U.S. Department of Justice has filed a civil forfeiture complaint seeking the seizure of roughly $16 million in crypto held in a Binance account following a year of investigations.

Details from a  court filing  reviewed by Decrypt show the tokens in question are allegedly connected to bribes authorized by Sam Bankman-Fried.

The case potentially complicates recovery efforts by law enforcement, given how the assets have more than doubled in value since their initial transfers.

Created in November 2023, the Binance account was said to have held Internet Computer (ICP), Avalanche (AVAX), Ripple (XRP), Cardano (ADA), and Solana (SOL) tokens. Notably, over half of the tokens held in the account were in SOL, accounting for about $8.5 million.

It’s estimated that their value has since ballooned to $16 million following the crypto market’s remarkable recovery this year, buoyed by an uplift in sentiment on the back of U.S.-listed Spot Bitcoin and Ethereum exchange-traded funds.

The case stems from a November 2021 incident where Bankman-Fried allegedly directed the transfer of 40 million USDT from an Alameda Research wallet to initiate a bribe for payment to Chinese officials. The purpose was to unfreeze approximately $1 billion worth of crypto held on two exchanges based in China.

Funds were traced through multiple private wallets, whose movements between December 2021 and December 2023 ultimately landed in a Binance deposit wallet, according to the filing.

Authorities claim the account showed suspicious transaction patterns, including "nearly daily" stablecoin and Bitcoin deposits that were "quickly converted" to other cryptos through over-the-counter trades.

It's the latest in a string of developments over the pursuit of assets tied to FTX-related crimes well after Bankman-Fried's  conviction  on seven criminal counts.

The former crypto mogul is currently serving a  25-year prison sentence  and has appealed his conviction, with his lawyer  claiming  the former CEO was "presumed guilty—before he was even charged."

Originally part of Bankman-Fried's indictment, the bribery allegations formed one of thirteen, charging him with conspiracy to violate the Foreign Corrupt Practices Act. That charge was later separated from the main trial that led to his conviction.