Former CEO of the bankrupt crypto exchange FTX, Sam Bankman-Fried, has pleaded not guilty to charges brought against him by U.S. authorities.
Bankman-Fried was appearing before a judge in the U.S. District Court in New York City with lawyers Mark Cohen and Christian Everdell.
Bankman-Fried Pleads Not Guilty
Sam Bankman-Fried, the founder and former CEO of bankrupt cryptocurrency exchange FTX, has pleaded not guilty to all eight counts of criminal charges brought against him by U.S. authorities. The embattled former CEO appeared before a judge at the U.S. District Court in New York City, in tow with his lawyers. Bankman-Fried had founded Alameda Research in 2017 and went on to establish FTX in 2019.
Bankman-Fried was expected to plead not guilty and could now be part of a lengthy legal battle, facing up to 115 years in prison if convicted.
Trial To Commence In October 2023
The court set the tentative trial date as 2nd October 2022, with prosecutors expected to present evidence related to the case to the court over the next four weeks. Additionally, Bankman-Fried is also not allowed to access any FTX or Alameda Research assets. The judge also agreed to a request to withhold the identities of two individuals, other than Bankman-Fried’s parents, who helped secure bail for the former CEO. The request was approved following reports that his parents have been subject to threats and harassment. According to lawyers,
“His parents have, in recent weeks, become the target of intense media scrutiny, harassment, and threats. Among other things, Mr. Bankman-Fried’s parents have received a steady stream of threatening correspondence, including communications expressing a desire that they suffer physical harm.”
SBF was released on a bond of $250 million, which is the largest-ever pretrial bond. Under the bail conditions, Bankman-Fried will also have to wear an “electronic monitoring bracelet,” attend mental health counseling, and remain under house arrest at his parents’ house in California.
Gary Wang, Caroline Ellison Plead Guilty
Back in December, FTX co-founder and former CTO Gary Wang and Alameda Research CEO Caroline Ellison pleaded guilty to criminal charges connected with the collapse of FTX. Both are also facing penalties from the Securities and Exchange Commission (SEC) and the CTFC, along with criminal charges brought by prosecutors. Both executives have stated they intend to cooperate with the authorities and will play a critical role as witnesses, given their close equation with Bankman-Fried, FTX, and Alameda Research.
A Risky Move
To many observers, Bankman-Fried’s plea is a risky move in stark contrast to that of his colleagues, Wang and Ellison, who both plead guilty. Many view his actions as cocky, given that he went on a full media tour before his arrest, appearing on several shows and Twitter spaces talks. Bankman-Fried was finally arrested in the Bahamas and then extradited to the United States in December.
The FTX Fiasco
The chaos at FTX saw Bankman-Fried step down as CEO, replaced by Enron veteran John Ray III. During the U.S. House Financial Services Committee, Ray was the only witness, with Bankman-Fried unable to join after his arrest. The hearing saw Ray reveal the extent to which customer funds were misused and the lack of internal controls and risk management systems. He also disclosed that there was no board overseeing operations at FTX, and neither did the exchange have an accounting or Human Resources department.
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