BIT Mining Ltd, formerly 500.com Ltd, has settled with US authorities to pay a $10 million penalty for its involvement in a scheme to bribe Japanese officials in its efforts to start a Japanese casino.
Government officials initially assessed BIT Mining Ltd. to pay a $54 million penalty for its bribery violations between 2017 and 2019 for violating the US Foreign Corrupt Practices Act requirements.
In addition, its company CEO, Zhengming Pan, currently faces criminal charges for involvement in bribery charges. 500.com was a famous publicly traded company with shares on the New York Stock Exchange.
US Justice Dep’t Explores Pan’s Indictment
BIT Mining Ltd’s CEO is currently facing several FCPA violations and crimes. According to multiple reports, Pan faces several allegations, including conspiracy to violate anti-bribery laws, two counts, and record and book offenses. Pan’s indictment was issued by the Federal Grand Jury of the District of New Jersey last June 18th.
US SEC charges Bit Mining with violating Foreign Corrupt Practices Act https://t.co/Y8N0WJeRNN pic.twitter.com/qlD0PlLopY
— Reuters (@Reuters) November 19, 2024
BIT Mining immediately acknowledged the charges, confirming that it arranged up to $1.9 million in bribes for its middlemen and Japanese officials between 2017 and 2019. The company started as 500.com, initially aiming to win the project to develop an integrated Japanese resort with dining, casino, and entertainment options.
In a statement by Principal Deputy Assistant Attorney General Nicole M. Argentieri, the company’s CEO instructed the company’s consultants to plan the bribery through questionable consulting contracts.
Pan’s plans include approving travel expenditures, cash transfers, gifts, and travel expenditures categorized as legitimate corporate expenses.
As of today, the market cap of cryptocurrencies stood at $3.02 trillion. Chart: TradingView
BIT Mining Faces $10 Million Penalty
BIT Mining faces a three-year deferred prosecution for its violations. While the company initially faced a $54 million penalty for its violations, the fee was reduced to just $10 million. Under the reduced fee payout, the Securities and Exchange Commission allowed a $4 million credit charged against SEC civil penalties, but it requires that BIT Mining comply with enhanced SEC regulations.
According to US attorney Philip Serlinger, the wrongdoings started at the top, with the CEO involved with illegal bribes and efforts to conceal these.
BIT Mining Taking Remedial Actions
BIT Mining is implementing a few remedial actions based on the Justice Department’s recommendations. For example, the company is boosting its board oversight by investing in processes that will verify its compliance.
BIT Mining has introduced anti-corruption policies, which have resulted in fewer penalties. While the company reduced penalties by 10%, these efforts are reactive and limited.
Still, the Federal Bureau of Investigation and other government agencies appreciate the case against BIT Mining. According to Chad Yarbrough of the FBI, the company’s indictment highlights its commitment to hold violators accountable for their illegal actions.
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