The US Department of Justice (DOJ) is taking a significant step in the ongoing fallout from the FTX collapse, filing a civil forfeiture complaint to seize approximately $16 million in cryptocurrency held in a Binance account. This action comes after a year-long investigation into funds allegedly linked to bribes authorized by Sam Bankman-Fried, the disgraced former CEO of the defunct crypto exchange FTX.
The seized funds consist of a variety of tokens, including Internet Computer ICP/USD, Avalanche (AVAX), Ripple XRP/USD, Cardano ADA/USD, and Solana SOL/USD. These tokens are believed to have originated from illicit transactions. Notably, over half of the holdings, valued at $8.5 million, are in Solana. This asset’s value has risen alongside the recent crypto market recovery, pushing the total value of the Binance account to $16 million.
The origins of this case can be traced back to November 2021 when Bankman-Fried allegedly directed a $40 million USDT/USD payment from Alameda Research wallets to bribe Chinese officials. This move was an attempt to unfreeze $1 billion in crypto assets held on two China-based exchanges. According to the DOJ, the funds passed through several private wallets before being deposited into the Binance account. The account attracted the attention of authorities due to its “suspicious activity.” This included almost daily deposits of stablecoins and Bitcoin SOL/USD, which were quickly converted to other assets through over-the-counter trades. These patterns led the DOJ to connect the assets with the bribery scheme.
This latest development adds another layer to the complex aftermath of FTX’s collapse. Bankman-Fried was convicted on seven criminal counts and sentenced to 25 years in prison. While his legal team is currently appealing the conviction, claiming trial bias, the bribery allegations were initially part of his indictment but were separated from the primary trial, which focused on fraud and conspiracy charges.
In related news, the Cyprus Securities and Exchange Commission (CySEC) has extended the suspension of FTX’s European division, FTX Europe, for another six months. This means that the platform is prohibited from offering services, advertising, or accepting new clients until at least May 30, 2025. This is the fourth suspension since CySEC first halted FTX Europe’s operations in November 2022 following FTX’s U.S. bankruptcy. The suspension allows the platform to finalize transactions and return funds to existing clients.
Meanwhile, in the United States, the DOJ is pursuing the recovery of up to $13.25 million in political donations tied to former FTX executives. Judge Lewis Kaplan, overseeing the criminal cases against Bankman-Fried and his associates, recently granted an extension until January 15, 2025, for the government to negotiate with political action committees (PACs) involved in these contributions.
The implications of these ongoing events will be discussed at Benzinga’s Future of Digital Assets conference on Nov. 19. Leading figures in the industry will address regulatory challenges and the evolving landscape of digital assets.
