Sam Bankman-Fried pleaded not guilty in Latest York federal court Tuesday to eight charges related to the collapse of his former crypto exchange FTX and hedge fund Alameda Research.
The onetime crypto billionaire was indicted on charges of conspiracy to commit wire fraud and securities fraud, individual charges of securities fraud and wire fraud, money laundering and conspiracy to avoid campaign finance regulations.
The trial will begin on Oct. 2.
Bankman-Fried arrived outside the courthouse in a black SUV and was swarmed with cameras from the moment his vehicle arrived. The scrum grew so thick that Bankman-Fried’s mother was unable to exit the vehicle, falling onto the wet pavement as cameras scrambled to catch a glimpse of her son.
Former FTX chief executive Sam Bankman-Fried (C) arrives to enter a plea before US District Judge Lewis Kaplan within the Manhattan federal court, Latest York, January 3, 2023.
Ed Jones | AFP | Getty Images
Bankman-Fried was hauled by security through the throng and into the courthouse in a matter of moments, with photographers scrambling to get out of the way in which.
Earlier within the day, attorneys for Bankman-Fried filed a motion to seal the names of two individuals who had guaranteed Bankman-Fried release on bail with a bond. They claimed that the visibility of the case and the defendant had already posed a risk to Bankman-Fried’s parents, and that the guarantors shouldn’t be subject to the identical scrutiny. Kaplan approved the motion in court.
Federal prosecutor Danielle Sassoon told the court that Bankman-Fried had worked with foreign regulators to transfer assets that FTX’s U.S. management had been attempting to get better through the Chapter 11 bankruptcy process.
Regulators within the Bahamas and FTX’s U.S. lawyers have been fighting for weeks in Delaware bankruptcy court over lots of of thousands and thousands, if not billions, of dollars price of cryptocurrency. FTX’s attorneys insist that Bahamian regulators have illicitly transferred lots of of thousands and thousands of dollars, and that Bankman-Fried assisted them.
Bahamian regulators say that local laws give them jurisdiction over those assets, and dispute the validity of the U.S. Chapter 11 proceedings.
Federal prosecutors appear to agree with FTX’s U.S. attorneys. Sassoon asked Kaplan to impose a recent restriction barring Bankman-Fried from transferring or accessing FTX customer assets. The judge approved that motion as well.
Bankman-Fried returned to the U.S. from the Bahamas on Dec. 21, and the subsequent day was released on a $250 million recognizance bond, secured by his family home in California.
Federal prosecutors also announced the launch of a recent task force to get better victim assets as a part of an ongoing investigation into Bankman-Fried and the collapse of FTX.
“The Southern District of Latest York is working across the clock to reply to the implosion of FTX,” U.S. Attorney Damian Williams said in an announcement Tuesday.
The U.S. attorney’s office for the SDNY had argued that Bankman-Fried used $8 billion price of customer assets for extravagant real estate purchases and vanity projects, including stadium naming rights and thousands and thousands in political donations.
Federal prosecutors built the indictment against Bankman-Fried with unusual speed, packaging together the criminal charges against the 30-year-old in a matter of weeks. The federal charges got here alongside complaints from the Commodity Futures Trading Commission and the Securities and Exchange Commission.
They were assisted by two of Bankman-Fried’s closest allies, Caroline Ellison, former CEO of his hedge fund Alameda Research, and Gary Wang, who co-founded FTX with Bankman-Fried.
Ellison, 28, and Wang, 29, pleaded guilty on Dec. 21. Their plea deals with prosecutors got here after rampant speculation that Ellison, Bankman-Fried’s onetime romantic partner, was cooperating with federal probes.
One other former FTX executive, Ryan Salame, apparently first alerted regulators to alleged wrongdoing inside FTX. Salame, a former co-CEO at FTX, flagged “possible mishandling of clients’ assets” to Bahamian regulators two days before the crypto exchange filed for bankruptcy protection, in line with a filing from the Securities Commission of the Bahamas.
Bankman-Fried was accused by federal law enforcement and financial regulators of perpetrating what the SEC called one in all the most important and most “brazen” frauds in recent memory. His stunning fall was precipitated by reporting that raised questions on the character of his hedge fund’s balance sheet.
Within the weeks since FTX’s Nov. 11 Delaware bankruptcy filing, the extent of Bankman-Fried’s alleged malfeasance has been exposed. Alternative CEO John J. Ray said there was a “complete failure of corporate control.”
Bankman-Fried was indicted in Latest York federal court on Dec. 9, and was arrested by Bahamas law enforcement on the request of U.S. prosecutors on Dec. 12. Following his indictment, Bankman-Fried’s legal team within the Bahamas flip-flopped on whether or not their client would consent to extradition.
WATCH: Sam Bankman-Fried arrives in court
