BIT Mining hit with $10M fine over bribery charges

Getting your Trinity Audio player ready...

U.S. authorities have settled with block reward miner BIT Mining for $10 million over allegations that it bribed Japanese politicians to advance its projects in the East Asian country.

The Justice Department indicted former BIT Mining CEO Zhengming Pan on charges of violating the Foreign Corrupt Practices Act (FCPA), including one count of conspiracy to violate the anti-bribery provisions. A federal grand jury in New Jersey also charged Pan with two counts of violating the FCPA’s books and records provisions.

The Securities and Exchange Commission (SEC) also announced a parallel legal action against BIT Mining over the bribery charges. 

The two authorities allege that between 2017 and 2019, BIT Mining paid $1.9 million in bribes to Japanese politicians through their intermediaries. At the time, it was known as 500.com and engaged in the casino and sports lottery business. The bribes were intended to help the company win a bid to open resorts and casinos in Japan. To conceal the bribes, the company paid them through sham contracts and other legitimate expenses, such as management advisory fees. Despite paying the bribes, the company didn’t win the bid.

“Today’s resolution and the charges against Pan demonstrate the department’s continued commitment to holding both corporate and individual wrongdoers accountable for their crimes,” commented Nicole Argentieri, head of the DoJ’s Criminal Division.

As 500.com, the company was based in Shenzhen, China, and traded on the New York Stock Exchange (NYSE) under the ticker symbol “WBAI.” Since then, it has shifted its focus to digital assets. It runs block reward mining and data center operations in Ohio and Texas and manufactures mining rigs. 

“Investors must have confidence that the operations and performance of public companies reflect merit and legitimate considerations. Bribery and corruption turn that dynamic on its head, distorting the orderly operation of the markets and undermining investor confidence,” commented SEC’s Charles Cain.

BIT Mining agreed to a $10 million fine with the DoJ, but $4 million will be credited against the civil penalty it will pay to the SEC. 

Under U.S. sentencing guidelines, BIT Mining was staring at a $54 million fine for its crimes. However, the DoJ says that the firm and the former CEO cooperated and assisted investigators in uncovering the truth, earning leniency. Additionally, the company’s financial conditions render it unable to pay such a large amount.

Watch: Futureproof Tech Summit 2024—Exploring new AI-blockchain business models