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

If convicted on all counts, he faces up to 115 years in prison.

Sam Bankman-Fried in a suit

Sam Bankman-Fried, the founder and former CEO of collapsed cryptocurrency exchange FTX, appeared in a federal court in Manhattan on Tuesday afternoon and pleaded not guilty to eight counts of defrauding customers, laundering money, and violating campaign finance laws. Bankman-Fried's trial was set for Oct. 2; if convicted of all the charges, he faces up to 115 years in prison.

Bankman-Fried, 30, was arrested in the Bahamas, where FTX is based, on Dec. 12 and extradited to the US on Dec. 21. He appeared in court the following day and was released on a $250 million bail package, one of the largest in US history. Under the terms of the package, he has been confined to his parents’ home in Palo Alto, California.

An unsealed indictment said that the crypto entrepreneur “knowingly devised” a scheme to defraud his customers. A US attorney said at a press conference that FTX was “one of the biggest financial frauds in US history” and that Bankman-Fried used the allegedly stolen money “for his personal benefit.”

In November, after investors rushed to withdraw their funds from FTX, fearing that it was about to collapse, the company declared bankruptcy and Bankman-Fried stepped down as CEO. It later emerged that the crypto exchange had been moving customer money into Alameda Research, a crypto hedge fund owned by Bankman-Fried.

Still, he protested that he was innocent. At the end of November, he appeared at a conference organized by the New York Times and said, “I did not ever try to commit fraud on anyone.” He blamed the collapse of FTX on poor record-keeping and nonexistent risk management.

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

Two of Bankman-Fried’s key associates, FTX cofounder Gary Wang, 29, and former Alameda co-CEO Caroline Ellison, 28, have pleaded guilty to federal fraud charges. Once housemates and close friends of Bankman-Fried — Ellison was reportedly romantically linked to the entrepreneur — the two are now cooperating witnesses, helping the US government’s investigation of FTX. According to Ellison’s unsealed plea transcript, Alameda secretly had lent billions to FTX’s top leaders.

Alongside 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 reparations for customers of FTX who lost their money, the agencies want to bar Bankman-Fried from acting as a director or officer of any company in the future.

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