Sam Bankman-Fried Said to Be Prepared to Enter Not Guilty Plea in US FTX Fraud Case

Sam Bankman-Fried is charged with cheating investors and looting billions of dollars at his now-bankrupt FTX cryptocurrency exchange.

By Reuters | Updated: 3 January 2023 18:35 IST

Sam Bankman-Fried Said to Be Prepared to Enter Not Guilty Plea in US FTX Fraud Case

Photo Credit: Reuters

Sam Bankman-Fried could face up to 115 years in prison if convicted

Highlights

Sam Bankman-Fried is being monitored after he was extradited to the US
He has been charged with two counts of wire fraud, six conspiracy counts
Two of Bankman-Fried's closest associates have pled guilty

Sam Bankman-Fried is expected on Tuesday to enter a plea of not guilty to criminal charges that he cheated investors and looted billions of dollars at his now-bankrupt FTX cryptocurrency exchange, according to a source familiar with the matter.

Bankman-Fried is accused of illegally using FTX customer deposits to support his Alameda Research hedge fund, buy real estate and make millions of dollars in political contributions, in what prosecutors have called a fraud of epic proportions.

He is scheduled to appear at 2pm EST (12:30am Wednesday, IST) before US District Judge Lewis Kaplan in Manhattan.

Genesis Crypto Broker Negotiating in Bad Faith, Co-Founder Says

A lawyer for Bankman-Fried did not immediately reply to a request for comment.

It is not unusual for criminal defendants to initially plead not guilty. Defendants are free to change their plea at a later date.

Bankman-Fried has been free on $250 million (roughly Rs. 2,070 crore) bond following his extradition last month from the Bahamas, where he lived and where the exchange was based.

FTX’s Sam Bankman-Fried May Enter Guilty Plea on Cheating Charges

Since his release, Bankman-Fried has been subject to electronic monitoring and required to live with his parents, both professors at Stanford Law School in California.

The Massachusetts Institute of Technology graduate has been charged with two counts of wire fraud and six conspiracy counts, including to launder money and commit campaign finance violations. He could face up to 115 years in prison if convicted.

Bankman-Fried has admitted to making mistakes running FTX but said he did not believe he was criminally liable.

Why 2023 Could See Progress Towards Regulatory Norms for Crypto

The 30-year-old crypto mogul rode a boom in the value of Bitcoin and other digital assets to become a billionaire several times over and an influential political donor in the US, until FTX collapsed in early November after a wave of withdrawals. The exchange declared bankruptcy on November 11.

Bankman-Fried's net worth, once estimated at $26 billion (roughly Rs. 2,15,470 crore), was largely wiped out when the exchange collapsed. He later said that he had $100,000 (roughly Rs. 82 lakh) in his bank account.

The prosecution case was strengthened by last month's guilty pleas of two of Bankman-Fried's closest associates.

Caroline Ellison, who was Alameda's chief executive, and Gary Wang, FTX's former chief technology officer, pleaded guilty to seven and four criminal charges, respectively, and agreed to cooperate with prosecutors.

Bankman-Fried, Ellison and Wang were also sued by the US Securities & Exchange Commission and Commodity Futures Trading Commission. Ellison and Wang settled those civil cases, the regulators said.

FTX's new chief executive, John Ray, known for his work on energy company Enron's bankruptcy, has said FTX was run by "grossly inexperienced" and unsophisticated people.

Where did Realme go wrong with the 10 Pro+ 5G? We discuss this on Orbital, the Gadgets 360 podcast. Orbital is available on Spotify, Gaana, JioSaavn, Google Podcasts, Apple Podcasts, Amazon Music and wherever you get your podcasts.

Affiliate links may be automatically generated - see our ethics statement for details.

Comments

For the latest tech news and reviews, follow Gadgets 360 on X, Facebook, WhatsApp, Threads and Google News. For the latest videos on gadgets and tech, subscribe to our YouTube channel. If you want to know everything about top influencers, follow our in-house Who'sThat360 on Instagram and YouTube.