BIT Mining Ltd, previously known as 500.com Ltd, admitted to bribing Japanese officials to advance its casino project plans.
The company was fined $54 million by US authorities for violating the Foreign Corrupt Practices Act (FCPA) between 2017 and 2019.
The BIT Mining Saga: CEO, Japanese Officials Face Charges
Due to cited financial struggles, the mining company was unable to pay the full amount. The US Department of Justice responded by reducing the penalty to $10 million, with $4 million allocated toward a related SEC civil penalty.
The mining company’s former CEO, Zhengming Pan, played a key role in orchestrating the bribery scheme. Pan faces charges for conspiring to break FCPA rules on anti-bribery and record-keeping. He is also charged with directly violating anti-bribery provisions once and record-keeping rules twice.
In a bid to push forward plans for a Hokkaido-based casino resort, Pan ordered company employees to release $2.5 million in bribe money. One of the lawmakers associated with the case, Tsukasa Akimoto, was sentenced to four years in prison and a $50,000 fine. He was one among many federal employees enlisted by Pan.
“Also because its stock is traded publicly on NYSE, so the SEC got into the game too by settling a civil suit against BIT Mining for falsifying their books and records (also a FCPA act violation, albeit not criminal),” crypto lawyer Bill Hughes said.
Pan allegedly hired consultants to help 500.com hide the bribes, which included cash, travel, entertainment, and gifts. To hide the transactions, Pan used fake contracts and labeled the payments as legitimate business expenses, such as advisory fees. Despite the scheme, 500.com failed to secure the resort bid in Japan.
In November 2019, before the bribery allegations even became public, Hokkaido’s governor chose not to nominate the prefecture as a potential site for Japan’s first phase of casino legalization, thereby nullifying Pan’s efforts.
Since the announcement, BTCM prices have dropped approximately 6.3% in the market at the time of writing.
Looking forward, BIT Mining has taken steps to improve its governance and compliance practices. The company now incorporates compliance metrics into senior management evaluations and has established anti-corruption policies.
But perhaps most importantly, the mining firm has pivoted away from high-risk industries altogether, signaling a broader effort to rebuild trust and focus on sustainable business practices.
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