Sam Bankman-Fried, Founder Of The Crypto Exchange FTX, Has Pleaded Not Guilty To Fraud And Other Charges

Sam Bankman-Fried, the founder and former CEO of collapsed cryptocurrency exchange FTX, appeared in a Manhattan federal court on Tuesday afternoon and pleaded guilty to defrauding consumers, money laundering, and violating campaign finance laws. Pleaded not guilty to eight counts. Bankman Freud’s trial was set for October 2. If convicted of all charges, he could face up to 115 years in prison.

Bankman-Fried, 30, was arrested in the Bahamas, where FTX is located, on Dec. 12 and extradited to the United States on Dec. 21. He appeared in court the next day and was released on a $250 million bail package. The largest in American history. Under the terms of the package, he is confined to his parents’ home in Palo Alto, California.

An unsealed indictment says the crypto entrepreneur “intentionally” devised a scheme to defraud its customers. A U.S. attorney said at a press conference that FTX was “the largest financial fraud in American history” and that Bankman-Fried allegedly used the stolen money “for her own personal gain.”

In November, as investors rushed to pull their funds from FTX, fearing it was about to collapse, the company declared bankruptcy and Bankman-Fried resigned as CEO. It later emerged that the crypto exchange was transferring customer money to Alameda Research, a crypto hedge fund owned by banker Mann Freud.

Still, he protested that he was innocent. In late November, he appeared at a conference sponsored by The New York Times and said, “I have never tried to defraud anybody.” He attributed the fall of FTX to poor record keeping and absence of risk management.

FTX’s new CEO, John Ray, said $7 billion was missing from the company. Bankman-Fried allegedly laundered stolen funds and violated campaign finance laws by making donations in other people’s names.

Two of Bankman-Fried’s key associates, FTX co-founder Gary Wang, 29, and former Alameda co-CEO Carolyn Ellison, 28, have pleaded guilty to federal fraud charges. One-time housemates and close friends of Bankman Freud – with whom Ellison was allegedly romantically involved – are now cooperating witnesses, helping the US government’s investigation of FTX. According to a transcript of Ellison’s unsealed plea, Alameda secretly loaned billions to top FTX leaders.

Along with the criminal investigation, Bankman-Fried faces civil complaints from the Securities and Exchange Commission and the Commodity Futures Trading Commission, which oversees the derivatives market. In addition to seeking compensation for FTX customers who lost their money, the agencies want to bar Bankmann Freud from serving as a director or officer of any company in the future.

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