Sam Bankman-Fried, the founder and former CEO of collapsed cryptocurrency exchange FTX, appeared in a federal court docket in Manhattan Tuesday afternoon and pleaded not guilty to 8 counts of defrauding consumers, laundering cash, and violating marketing campaign finance laws. If convicted, he faces up to 115 many years in jail.
Bankman-Fried, 30, was arrested in the Bahamas, in which FTX is dependent, on Dec. 12 and extradited to the US on Dec. 21. He appeared in courtroom the following working day and was launched on a $250 million bail deal, one particular of the most significant in US historical past. Beneath the phrases of the offer, he has been confined to his parents’ house in Palo Alto, California.
An unsealed indictment claimed that the crypto entrepreneur “knowingly devised” a plan to defraud his clients. A US lawyer explained at a push meeting that FTX was “one of the largest monetary frauds in US history” and that Bankman-Fried utilized the allegedly stolen dollars “for his particular profit.”
In November, after investors rushed to withdraw their funds from FTX, fearing that it was about to collapse, the firm declared bankruptcy and Bankman-Fried stepped down as CEO. It later on emerged that the crypto exchange had been moving consumer income into Alameda Investigation, a crypto hedge fund owned by Bankman-Fried.
Still, Bankman-Fried protested that he was innocent. At the stop of November, he appeared at a convention arranged by the New York Instances and reported, “I did not at any time check out to dedicate fraud on any one.” He blamed the collapse of FTX on very poor document maintaining and nonexistent threat management.
John Ray, the new CEO of FTX, experienced stated that $7 billion is missing from the firm. Bankman-Fried allegedly laundered the stolen funds and violated campaign finance legal guidelines by building donations in the names of other individuals.
Two of Bankman-Fried’s important associates, FTX cofounder Gary Wang, 29, and former Alameda co-CEO Caroline Ellison, 28, have pleaded responsible to federal fraud costs. At the time housemates and shut buddies of Bankman-Fried — Ellison was reportedly romantically linked to the entrepreneur — the two are now cooperating witnesses, serving to the US government’s investigation of FTX. In accordance to Ellison’s unsealed plea transcript, Alameda secretly experienced lent billions to FTX’s major leaders.
Together with the prison investigation, Bankman-Fried faces civil grievances from the Securities and Trade Fee and the Commodity Futures Investing Fee, which oversees the derivatives market. In addition to searching for reparations for consumers of FTX who dropped their cash, the agencies want to bar Bankman-Fried from performing as a director or officer of any company in the future.