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BIT Mining Faces SEC Charges
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Subscribe22 NOV 2024 / SEC UPDATES
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The SEC has announced a $10 million settlement with cryptocurrency player, BIT Mining, for violating the Foreign Corrupt Practices Act (FCPA). After an investigation revealed illicit payments, false records, and poor internal controls, BIT Mining committed to a three-year compliance mandate and former CEO Zhengming Pan now faces charges of conspiracy and record falsification; the case underlines the importance of transparency and integrity within global corporations.
The Securities and Exchange Commission (SEC) announced a $10 million settlement with BIT Mining for violations of the Foreign Corrupt Practices Act (FCPA). “Bribery and corruption distort market dynamics and undermine investor confidence,” said Charles E. Cain, SEC FCPA Unit Chief, emphasizing the far-reaching consequences of weak internal controls. Once a leader with an 82.5-megawatt cryptocurrency mining data center and cutting-edge 7-nanometer machines, the Shenzhen, China-based company had ambitious plans to enter Japan’s lucrative integrated resort casino market. Between 2017 and 2019, then-CEO Zhengming Pan directed $2.5 million in illicit payments to Japanese government officials in an attempt to secure favor for the casino project. These payments, disguised as management advisory fees, ultimately backfired, leaving the company ensnared in regulatory investigations instead of celebrating success.
The Securities and Exchange Commission (SEC) uncovered significant violations of the Foreign Corrupt Practices Act (FCPA) by BIT Mining. The investigation revealed that the company:
Simultaneously, the Department of Justice (DOJ) indicted then-CEO Zhengming Pan, alleging his direct role in orchestrating and concealing the bribery scheme. BIT Mining entered into a deferred prosecution agreement (DPA) with the DOJ, facing charges of conspiring to violate anti-bribery laws and falsifying records. This dual action underscores the consequences of corporate misconduct and weak governance. BIT Mining agreed to pay a $10 million penalty, significantly reduced from $54 million due to its financial struggles. Of this amount, $4 million covered the SEC’s civil fine. The company also committed to a three-year compliance mandate, which includes overhauling governance, implementing anti-corruption training, and regularly reporting progress to the DOJ. For the CEO, the fallout was personal. He now faces charges of conspiracy, violating anti-bribery provisions, and falsifying records, highlighting that corporate leaders are not exempt from accountability.
BIT Mining has introduced several reforms to repair the damage and rebuild trust:
While these changes are crucial, the scandal underscores the importance of proactive compliance to prevent misconduct. BIT Mining’s case demonstrates that ethical shortcuts lead to financial losses, reputational harm, and legal fallout, stalling business progress. In today’s regulatory climate, integrity and transparency are essential for global corporations. Although BIT Mining is working to rebuild, its story serves as a cautionary tale: trust is difficult to regain, and recovery is a long road. To know more. Stay updated with more insights by subscribing to our weekly newsletter for the latest trends!
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