In order to resolve an investigation by the U.S. Department of Justice into the purported bribery of Japanese officials, BIT Mining will pay a total criminal penalty of $10 million.
The firm also consented to pay a $4 million civil penalty in a parallel action to resolve comparable allegations from the U.S. Securities and Exchange Commission. This penalty will be considered in the DOJ’s calculations.
In order to resolve investigations conducted by the U.S. Department of Justice and U.S. Securities and Exchange Commission regarding the company’s involvement in an alleged conspiracy to bribe Japanese government officials, BIT Mining has consented to pay a total penalty of $10 million.
BIT Mining (formerly 500.com) acknowledged to paying $1.9 million in bribes to Japanese government officials, via consultants, between 2017 and 2019, according to court documents. The company ultimately failed to secure a casino resort proposal. BIT Mining has engaged into a three-year deferred prosecution agreement pertaining to one count of conspiracy to violate the anti-bribery and books and records provisions of the Foreign Corrupt Practices Act, as well as one count of violating the books and records provisions of the FCPA. The Department of Justice also charged Zhengming Pan, the former CEO of the company, with violating the FCPA. Pan is a Chinese national.
Shenzhen, China-based 500.com was an online sports lottery service provider that traded its shares on the New York Stock Exchange under the symbol “WBAI.” The corporation rebranded as BIT Mining in April 2021 and changed its ticker symbol to “BTCM” in order to concentrate on cryptocurrency mining.
BIT Mining concurred that the appropriate criminal penalty under U.S. sentencing guidelines was $54 million. Nevertheless, the DOJ consented to the $10 total criminal penalty due to the firm’s financial situation and its inability to pay the full amount. Additionally, the organization consented to pay a $4 million civil penalty in a separate proceeding to resolve comparable SEC allegations. The Department of Justice will apply this sum to the total. The SEC estimated that the bribery conspiracy involved illicit payments of approximately $2.5 million in cash gratuities, entertainment, and extravagant vacations.
Nicole M. Argentieri, the chief of the DOJ Criminal Division, stated that “BIT Mining, under the alleged direction of then-CEO Zhengming Pan, consented to pay nearly $2 million in bribes to Japanese government officials in order to secure a contract to establish a lucrative resort and casino in Japan. Today’s resolution and the allegations against Pan are indicative of the department’s ongoing dedication to deterring corporate and individual wrongdoers from committing crimes.”
“Investors must have the assurance that the operations and performance of public companies are based on legitimate considerations and merit.” Charles E. Cain, Chief of the SEC Enforcement Division’s FCPA Unit, stated that bribery and corruption disrupt the orderly operation of the markets and undermine investor confidence. “In this instance, 500.com’s inadequate controls created an environment that facilitated a bribery conspiracy that involved influential Japanese officials and the company’s highest-ranking officials.”
Japanese authorities provided assistance to the DOJ and FBI International Corruption Unit investigation, which awarded BIT Mining credit for its cooperation. In addition, BIT Mining consented to enhance its compliance programs, report remediation efforts to the DOJ, and cooperate in any ongoing or future criminal investigations during the DPA’s three-year term.
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