BIT Mining to Pay $10 Million Fine in U.S. for Bribery in Japan

BIT Mining has agreed to pay a $10 million fine to settle charges from the U.S. Department of Justice over bribing Japanese officials.

Former CEO Indicted for Role in Bribing Japanese Officials and BIT Mining Ltd. Resolves Foreign Bribery Investigation

?: https://t.co/FreYjxbkJZ pic.twitter.com/0Q1zDAjur2

— Criminal Division (@DOJCrimDiv) November 18, 2024

In 2021, the Chinese company 500.com Limited, listed on the New York Stock Exchange, rebranded as BIT Mining. This change was linked to the firm’s shift from providing online lottery services to cryptocurrency mining.

Court documents reveal that between 2017 and 2019, the company engaged in a corrupt scheme in Japan to secure a contract for a resort development. During this period, its then-CEO, Zhengming Pan, along with employees and agents, paid $1.9 million in bribes, fees, and other incentives to officials and intermediaries.

The firm falsely recorded these payments as legitimate expenses, entering into fictitious contracts for consulting and management services. Violations of accounting standards were also part of the charges.

Despite these efforts, 500.com lost the bid for the potentially lucrative project, which included hotels, casinos, retail, restaurants, conference halls, and entertainment venues, according to law enforcement.

Under U.S. sentencing guidelines, the company faced a potential fine of up to $54 million. The Department of Justice considered BIT Mining’s financial situation, which would not allow for such penalties.

In total, the firm will pay $10 million, which includes a $4 million civil penalty to resolve a parallel investigation by the U.S. Securities and Exchange Commission.

The Department of Justice also acknowledged BIT Mining’s cooperation during the investigation, which involved providing financial and other confidential information, often restricted by Chinese law.

Law enforcement noted that the company has taken corrective measures, such as enhancing risk controls and audits by the board of directors. Additionally, BIT Mining has shifted its business model to an industry with lower corruption risk and reduced its presence in problematic regions.

These factors allowed the authorities to apply the lower end of the sentencing guidelines to the company.

Back in February 2021, BIT Mining (then still 500.com) acquired the mining pool BTC.com. The company purchased the entity from Bitmain co-founder Jihan Wu, who received it as a settlement after resolving a conflict with his partner Micree Zhan.

In December 2023, the firm sold the then-unprofitable pool to the Hong Kong company Esport – Win Limited.