$4M SEC Settlement Over FCPA Violations
BIT Mining, previously called 500.com, has agreed to pay a $4 million civil penalty in settlement with the U.S. Securities and Exchange Commission. The SEC has charged the crypto mining company for violation of the Foreign Corrupt Practices Act. The commission uncovered a bribery scheme to influence Japanese government officials.
According to filings made with the SEC, BIT Mining had engaged in corrupt practices between 2017 and 2019. The company was said to have paid US$2.5 million in bribes masquerading as consultant contracts and management advisory fees. These were part of efforts to win a bid for the development of an integrated resort casino in Japan-a very competitive project that attracted international attention.
DoJ Involvement and Additional Penalties
Apart from the SEC fine, the U.S. Department of Justice DoJ has imposed a $10 million criminal fine on BIT Mining. Although the Guideline penalty by the U.S. Sentencing Guidelines was calculated to $54 million, the DoJ reduced the amount because the company’s financial position is precarious. Thus, BIT Mining made a confirmation that it could not pay the whole amount.
The company reached a three-year deferred prosecution agreement with the DoJ to resolve charges of conspiracy to violate the anti-bribery and books-and-records provisions of the FCPA. In addition, direct violations of the books-and-records provisions were settled under the deal, which ensures that going forward, compliance within the company will be significantly improved.
Leadership Implicated in Scheme
This scheme from the very top-the company’s CEO allegedly was fully engaged in orchestrating the illicit payments and subsequent cover-up of those payments,” said U.S. Attorney Philip R. Sellinger for the District of New Jersey. As authorities explained, when involvement reaches the top, the violations are deemed particularly serious.
Lessons for the Crypto Sector
BIT Mining’s settlement with the SEC and DoJ is a powerful reminder of the legal and financial consequences that come with non-compliance related to anti-corruption laws. This case emphasizes that transparency, ethical governance, and strong record-keeping are vital elements in the rapidly changing crypto sector.
As more regulators worldwide turn their attention to cryptocurrency operators, the fines imposed on BIT Mining stand as a lesson for companies operating across borders and jurisdictions.
