Bitcoin mining company BIT Mining has admitted to authorizing bribes to Japanese politicians to win a bid for a resort and casino license in Japan. The company has agreed to pay a $10 million fine to the U.S. government to resolve the charges.
BIT Mining's bribery campaign took place from 2017 to 2019, when the company was known as 500.com — a Chinese online sports lottery company.
The bribes included about $2.5 million in illegal cash, entertainment, and luxury trips for Japanese politicians, according to a November 18 announcement from the U.S. Securities and Exchange Commission (SEC).
BIT Mining has agreed to pay a $4 million civil penalty to the SEC and a $10 million criminal penalty to the U.S. Department of Justice (DOJ).
However, $4 million of that will be repaid through a civil penalty to the SEC.
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Meanwhile, the DOJ has also charged former 500.com CEO Zhengming Pan with arranging bribes.
The DOJ said he entered into “sham contracts” with third-party consultants to make illegal payments and falsely recorded those payments as legitimate business expenses to conceal the bribes.
Source: Ministry of Justice
The contract would have allowed the company to open a resort, including hotels, casinos, retail, food, convention facilities and entertainment centers in Japan. However, the company failed to win the contract to open the resort.
“Paying bribes to foreign government officials is a serious crime,” said U.S. Attorney Philip Sellinger for the District of New Jersey.
One of the heads of the SEC's Enforcement Division, Charles E. Cain, said that these bribes affect investor confidence in public companies, which are supposed to operate with fairness and integrity:
“Bribery and corruption disrupt order, distort the stable operation of markets and undermine investor confidence.”
Under the US Sentencing Council Guidelines, BIT Mining could have faced a criminal fine of $54 million, but this was reduced due to BIT Mining's financial condition and ability to pay the fine.
The company moved into Bitcoin mining in December 2020 and announced its name change three months later in March.
Shares of BIT Mining (BTCM) fell 6.3% in after-hours trading as the SEC and DOJ made their announcement, data from Google Finance shows.
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