BIT Mining to pay $10M fine for bribing Japanese politicians in former life

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As a seasoned crypto investor with a keen eye for corporate ethics, I find this news about BIT Mining quite disheartening. The revelation that they authorized bribes to Japanese politicians to win a casino license is not only unethical but also a clear violation of trust and the law.

BIT Mining, a company specializing in Bitcoin mining, has acknowledged making corrupt payments to Japanese political figures as part of a strategy to secure a resort and casino license in Japan. As a result, they will pay a fine of $10 million to the U.S. authorities to settle these allegations.

500.com, previously known as BIT Mining, engaged in a bribery scheme from 2017 to 2019 during its time as a Chinese online sports lottery company.

Approximately $2.5 million in under-the-table payments, enjoyable experiences, and luxurious vacations were reportedly given as bribes to Japanese politicians, as per the United States Securities and Exchange Commission’s declaration on November 18th.

BIT Mining has consented to a $4 million civil fine from the Securities and Exchange Commission (SEC) and a $10 million criminal penalty to the United States Department of Justice (DOJ). In simpler terms, they’ve been fined $4 million by the SEC for a civil matter, and they’ll also pay $10 million as a criminal fine to the DOJ.

However, $4 million of that will be satisfied from the civil penalty that must be paid to the SEC.

Meanwhile, the DOJ has also charged 500.com’s then-CEO Zhengming Pan for orchestrating the bribes. 

As an analyst, I’d rephrase that statement like this: I was found to have created fake consulting agreements to disguise illegal payments and misleadingly categorize these payments as valid business expenses, thereby hiding the fact that they were actually bribes.

As a crypto investor, I had high hopes when I learned that the company was eyeing a contract to establish a comprehensive resort in Japan, featuring hotels, casinos, retail outlets, dining options, convention centers, and entertainment venues. However, unfortunately, our expectations were not met as the company didn’t manage to secure the contract to open the resort.

US Attorney Philip Sellinger for the District of New Jersey emphasized that offering bribes to foreign government officials is a severe offense,” or simply, “US Attorney Sellinger highlighted that giving bribes to foreign officials is a criminal act.

One of the leaders in the Securities and Exchange Commission’s (SEC) Enforcement Division, Charles E. Cain, stated that these types of bribes undermine trust that investors have in corporations that are expected to function based on skill and honesty, implying that such actions harm investor confidence in public companies.

“Bribery and corruption turn that dynamic on its head, distorting the orderly operation of the markets and undermining investor confidence.”

Based on U.S. Sentencing Guidelines, BIT Mining was initially subjected to a $54 million criminal penalty. However, considering their financial situation and inability to meet the fine, the penalty was reduced instead.

In December 2020, the company began Bitcoin mining operations, and they revealed their new name three months afterward, in March.

BIT Mining’s (BTCM) shares experienced a 6.3% decline in extended trading following the release of statements by both the Securities and Exchange Commission (SEC) and the Department of Justice (DOJ). This is according to data from Google Finance.

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2024-11-19 03:51