Sam Bankman-Fried Pleads Not Guilty in FTX Fraud Case; October trial appointment

NEW YORK, Jan 3 (Reuters) – Sam Bankman-Fried pleaded not guilty on Tuesday to criminal charges accused of defrauding investors at the bankrupt FTX cryptocurrency exchange and causing billions of dollars in losses. fraud.

He entered his plea in Manhattan federal court where he faces eight felony counts, including conspiracy to commit wire fraud and money laundering. The 30-year-old former tycoon is accused of looting FTX clients’ deposits to support hedge fund Alameda Research, buy real estate and donate millions of dollars to political causes.

“Client funds were also used and laundered through political donations, charitable donations and various venture investments,” federal prosecutor Danielle Sassoon said at the hearing.

Sassoon said prosecutors will turn over hundreds of thousands of documents to the defense in the coming weeks, suggesting the government has a deep well of evidence against Bankman-Fried.

U.S. District Judge Lewis Kaplan on Tuesday set an Oct. 2 date for Sassoon’s trial, which he said could last four weeks.

The government secured guilty pleas from two former key Bankman-Fried’s employees — former Alameda CEO Caroline Ellison and former FTX chief technology officer Gary Wang — who cooperated with prosecutors and could testify at trial.

A clean-shaven Bankman-Fried entered the courthouse wearing a blue suit, white shirt and polka-dot blue tie, and carrying a backpack — a far cry from the shorts and T-shirt he preferred when he ran FTX from the Bahamas.

Bankman-Fried did not speak to the judge during the hearing, but spoke privately with his lawyers. He shook hands with one of the prosecutors before the trial. In the end, he approached several courtroom sketch artists and commented on their work.

The Massachusetts Institute of Technology graduate could face up to 115 years in prison if convicted. He previously admitted that he had made mistakes at the FTX, but said that he did not believe that he was criminally responsible.


Bankman-Fried rode the boom in the value of bitcoin and other digital assets to create a net worth of about $26 billion and become an influential political donor in the United States.

FTX collapsed in early November after a wave of withdrawals, and Bankman-Fried declared bankruptcy on November 11, wiping out its assets. Later, he said that he had 100,000 dollars in his bank account.

He was extradited last month from the Bahamas, where he lives and where the exchange is located.

Bankman-Fried has been under electronic monitoring since being released on $250 million bond on Dec. 22 and required to live with her parents, Joseph Bankman and Barbara Fried, a professor at Stanford Law School in California. Fried attended her son’s hearing on Tuesday.

On Tuesday, Kaplan imposed a new bail condition, saying Bankman-Fried cannot access FTX or Alameda assets.

It comes after Sassoon accused Bankman-Fried of moving assets to an unnamed foreign country that it thought would be “softer”. He said prosecutors were also investigating reports late last month that Alameda transferred money from cryptocurrency wallets, though he said there was no evidence Bankman-Fried made those transactions.

Bankman-Fried’s attorney, Mark Cohen, said his client “didn’t do” the Alameda transfers. Referring to the allegation that Bankman-Fried sought to transfer money overseas, he said his client was trying to comply with a court order in the Bahamas last month that temporarily seized some of FTX’s assets.

The Securities Commission of the Bahamas (SCB) – the Caribbean nation’s financial regulator – did not immediately respond to a request for comment.

SCB ordered Bankman-Fried and Wang to transfer the assets to their control in November, Commission Executive Director Christina Rolle said in a Dec. 29 filing with the Bahamas Supreme Court. The Bahamas has appointed liquidators to wind up FTX’s international trading business.

On Tuesday, Kaplan also granted Bankman-Fried’s request not to disclose the names of two additional cosigners for the bond.

Bankman-Fried’s attorneys said her parents, who signed the agreement, received physical threats after the FTX breakup, and other partners may face similar harassment.

Reporting by Jack Queen and Luc Cohen in New York Additional reporting by Jonathan Stempel in New York Editing by Noeleen Walder and Matthew Lewis

Our standards: Thomson Reuters Trust Principles.

Luc Cohen

Thomson Reuters

Reports on New York federal courts. Previously, he worked as a reporter in Venezuela and Argentina.

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