BIT Mining Fined $10 Million for Bribing Japanese Politicians in Casino License Scandal

Bitcoin mining firm BIT Mining has agreed to pay $10 million in fines to the U.S. government after admitting to bribing Japanese politicians during its previous operations as an online sports lottery company, 500.com. The illicit activities, carried out between 2017 and 2019, aimed to secure a lucrative resort and casino license in Japan.

Bribery and Concealment

According to the U.S. Securities and Exchange Commission (SEC), BIT Mining authorized approximately $2.5 million in cash bribes, extravagant trips, and entertainment for Japanese officials. These bribes were facilitated through sham contracts with third-party consultants and falsely recorded as legitimate business expenses.

The company’s then-CEO, Zhengming Pan, has been charged by the U.S. Department of Justice (DOJ) for orchestrating the scheme. Despite these efforts, the company failed to win the contract to develop the resort, which was planned to include hotels, casinos, retail outlets, dining establishments, and entertainment venues.

Legal Penalties and Reductions

BIT Mining has agreed to a $10 million criminal fine imposed by the DOJ, with $4 million of that sum offset by a civil penalty payable to the SEC. The original fine, under U.S. Sentencing Guidelines, could have been as high as $54 million but was significantly reduced due to the company’s financial condition and inability to pay.

Enforcement Statements

U.S. Attorney Philip Sellinger emphasized the severity of bribing foreign officials, stating, “Paying bribes to foreign government officials is a serious crime.” Charles E. Cain, a Chief within the SEC’s Enforcement Division, highlighted the broader impact, noting such schemes undermine investor trust in public companies.

Transition to Bitcoin Mining

Following the scandal, 500.com rebranded to BIT Mining in March 2021, signaling a shift in its business model. The company entered the Bitcoin mining industry in December 2020, distancing itself from its controversial past.

Market Impact

News of the fines caused BIT Mining (BTCM) shares to drop by 6.3% in after-hours trading, according to Google Finance data.

This case serves as a stark reminder of the legal and financial consequences companies face when engaging in corrupt practices. Stay tuned for updates on this developing story.