BIT Mining, a cryptocurrency mining company, has reached a settlement with U.S. authorities, agreeing to pay $10 million to resolve allegations of bribery involving Japanese officials. The company admitted to violating the Foreign Corrupt Practices Act (FCPA) by conspiring to pay bribes and falsifying records to secure a resort license in Japan.
The Bribery Scandal
Between 2017 and 2019, BIT Mining’s former CEO, Zhengming Pan, along with other employees, paid $1.9 million in bribes. These payments, which included cash, gifts, travel, and entertainment, were funneled through intermediaries to Japanese officials. The bribes were disguised as legitimate expenses, such as management advisory fees, in an attempt to secure an integrated resort project in Japan. Despite these efforts, the company failed to win the bid.
The U.S. Department of Justice revealed that third-party consultants were used to facilitate and conceal the illicit payments. BIT Mining, formerly known as 500.com, acknowledged that these actions violated anti-bribery laws under the FCPA.
Legal Outcome and Penalties
As part of the resolution, BIT Mining signed a three-year Deferred Prosecution Agreement (DPA) with the Department of Justice and the Securities and Exchange Commission (SEC). Former CEO Zhengming Pan faces multiple charges, including conspiracy and violations of anti-bribery provisions under the FCPA.
Initially, the company was assessed a $54 million penalty based on U.S. sentencing guidelines. However, this amount was reduced to $10 million after considering BIT Mining’s financial challenges. Additionally, up to $4 million of the penalty will be credited toward a separate civil fine to the SEC.
Official Statements
Philip R. Sellinger, U.S. Attorney for the District of New Jersey, criticized the company’s leadership, stating:
“Bribing foreign government officials is a grave offense. BIT Mining’s leadership, including its then-CEO, orchestrated an illegal scheme to influence Japanese officials and secure a resort license. The corruption originated at the top and was concealed through deliberate efforts.”
Broader Implications
This case highlights the severe consequences of corporate misconduct in international business. The FCPA continues to serve as a critical tool for holding companies and executives accountable for unethical practices abroad.
The settlement also underscores the importance of ethical governance and robust compliance programs, especially for companies operating in regions vulnerable to corruption. Under the terms of the DPA, BIT Mining will remain under scrutiny to ensure it upholds ethical standards moving forward.
