Sam Bankman-Fried has pleaded not guilty to federal fraud charges in New York

Sam Bankman-Fried pleaded not guilty Tuesday in New York federal court to eight charges related to the bankruptcy of former cryptocurrency exchange FTX and hedge fund Alameda Research.

The onetime cryptocurrency billionaire was indicted on charges of conspiracy to commit money fraud and securities fraud, securities fraud and money fraud, money laundering and conspiracy to evade campaign finance regulations.

The trial will begin on October 2.

Bankman-Fried arrived in front of the courthouse in a black SUV, and his car was filled with cameras from the moment he arrived. The scrum became so thick that Bankman-Fried’s mother was unable to get out of the car, falling to the wet pavement as cameras scrambled to catch a glimpse of her son.

Bankman-Fried was ushered by security through the crowd and into the courthouse within minutes, as photographers scrambled to get out of the way.

Earlier in the day, Bankman-Fried’s attorneys filed a motion to seal the names of two people who guaranteed Bankman-Fried’s release on bail. They argued that the appearance of the case and the defendant already posed a risk to Bankman-Fried’s parents, and sureties should not be subject to the same scrutiny. Kaplan approved the motion in court.

Federal prosecutor Danielle Sassoon told the court that Bankman-Fried worked with foreign regulators to transfer assets that FTX was trying to recover through the US Chapter 11 bankruptcy process.

Bahamian regulators and U.S. attorneys for the FTX have been battling for weeks in Delaware bankruptcy court over hundreds of millions, if not billions, of dollars worth of cryptocurrency. FTX’s lawyers insist that Bahamian regulators illegally transferred hundreds of millions of dollars and that Bankman-Fried helped them.

Bahamian regulators say local law gives them jurisdiction over those assets, and they challenge the validity of the US Chapter 11 proceedings.

Federal prosecutors agree with FTX’s US attorneys. Sassoon asked Kaplan to impose a new restriction prohibiting Bankman-Fried from transferring or accessing FTX client assets. The judge approved that petition.

Bankman-Fried returned to the United States from the Bahamas on December 21 and was released the next day on a $250 million recognizance bond, secured by her family’s home in California.

Federal prosecutors also announced the launch of a new task force to recover assets from victims as part of the ongoing investigation into the bankruptcy of Bankman-Fried and FTX.

“The Southern District of New York is working around the clock to respond to the FTX explosion,” U.S. Attorney Damian Williams said in a statement Tuesday.

The US attorney for SDNY alleged that Bankman-Fried used $8 billion in client assets for extravagant real estate purchases and empty projects, including stadium naming rights and millions in political donations.

Federal prosecutors drew up the indictment against Bankman-Fried with extraordinary speed, cobbling together the criminal charges against the 30-year-old in a matter of weeks. The federal charges came along with complaints from the Commodity Futures Trading Commission and the Securities and Exchange Commission.

They were helped by two of Bankman-Fried’s closest allies, Caroline Ellison, the former CEO of hedge fund Alameda Research, and Gary Wang, who co-founded FTX with Bankman-Fried.

Ellison, 28, and Wang, 29, pleaded guilty on December 21. Their talks with prosecutors came after widespread speculation that Ellison, Bankman-Fried’s onetime romantic partner, was cooperating with federal investigations.

Another former FTX executive, Ryan Salame, apparently first alerted regulators to alleged wrongdoing within FTX. Salame, the former CEO of FTX, reported “possible mismanagement of client assets” to Bahamian regulators two days before the cryptocurrency exchange filed for bankruptcy protection, according to a Bahamas Securities Commission filing.

Bankman-Fried has been accused by federal law enforcement and financial regulators of perpetrating what the SEC called one of the largest and most “brazen” frauds in recent memory. Reports raising questions about the nature of his hedge fund balance sheet hastened his stunning decline.

In the weeks following FTX’s Nov. 11 bankruptcy filing in Delaware, the extent of Bankman-Fried’s alleged abuses came to light. Acting CEO John J. Ray said there was a “complete failure of corporate oversight.”

Bankman-Fried was indicted in New York federal court on Dec. 9 and arrested by Bahamian law enforcement on Dec. 12 at the request of U.S. prosecutors. Following the indictment, Bankman-Fried’s Bahamas legal team commented on the matter. their client would not consent to extradition.

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