In a settlement with US authorities, BIT Mining agreed to pay $10 million in penalties related to bribery allegations involving Japanese government officials to secure a resort license. The company, which operates in the Bitcoin mining sector, admitted to violating the Foreign Corrupt Practices Act (FCPA) by conspiring to pay bribes and falsifying records.
As part of the resolution, BIT Mining entered into a three-year deferred prosecution agreement (DPA) with the US Justice Department and the SEC. The former CEO Zhengming Pan also faces indictment on multiple charges, including conspiracy and violations of anti-bribery provisions of the FCPA.
The official press release revealed that BIT Mining’s then-CEO and other employees paid around $1.9 million in bribes in cash, travel, entertainment, and gifts to Japanese officials through intermediaries between 2017 and 2019.
The goal was to secure a bid for an integrated resort in Japan. Pan engaged third-party consultants to facilitate and conceal the bribes, which were disguised as legitimate business expenses like management advisory fees. Despite these efforts, the company ultimately lost the bid for the resort project.
In a statement, US Attorney Philip R. Sellinger for the District of New Jersey said,
“Paying bribes to foreign government officials is a serious crime. The top leadership of BIT Mining, then known as 500.com, directed consultants to pay bribes to Japanese government officials to win a bid to open a large resort in Japan. The illegal scheme started at the top, with the company’s CEO allegedly fully involved in directing the illicit payments and the subsequent efforts to conceal them.”
As part of its Deferred Prosecution Agreement (DPA), BIT Mining had initially agreed to pay a $54 million criminal penalty based on the country’s sentencing guidelines. However, due to its financial challenges, the company and the Justice Department agreed to reduce the penalty to $10 million.
Additionally, BIT Mining will receive a credit of up to $4 million against the civil penalty it has agreed to pay to the SEC as part of a separate investigation.