Disgraced FTX founder Sam Bankman-Fried pleads NOT guilty in crypto fraud case

Disgraced FTX founder Sam Bankman-Fried pleads NOT guilty in crypto fraud case
Sam Bankman-Fried arrived at Manhattan federal court on Tuesday, the second appearance since his extradition from the Bahamas (Michael M Santiago/Getty Images)

MANHATTAN, NEWYORK CITY: Sam Bankman-Fried, the disgraced FTX founder accused of defrauding clients pleaded not guilty at Manhattan federal court on Tuesday, January 3. It was his second appearance since his extradition from the Bahamas. Bankman-Fried ran a well-known cryptocurrency exchange, FTX, but allegedly used the platform's invested money to support his hedge fund Alameda Research besides spending it for his extravagant personal life. 

He was released after his arrest last month on a $250 million bail package. As part of his alleged vast fraud scheme, Bankman-Fried is also charged with conspiracy to violate campaign finance laws and conspiracy to commit money laundering, according to the indictment. However, if convicted the 30-year-old former billionaire could face around 115 years of jail term. Judge Lewis Kaplan scheduled a tentative trial on October 2, 2023, as per reports.

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In 2019, he was a prominent figure in the crypto world, notably for his political links, and celebrity endorsements. However, a flood of client withdrawals triggered by reports of unstable finances pushed FTX to declare bankruptcy and uncover billions of dollars in missing cash in November as per BBC.

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About 15 minutes before Bankman-Fried's arraignment, his US Attorney Damian Williams announced the formation of a special "FTX Task Force to deal with “matters related to the FTX collapse.” It includes "trying to recover victims’ swindled assets," as per the New York Post report. “We don’t know whether it was the defendant who made these transfers,” Assistant US Attorney Danielle Sassoon said in court. Bankman-Fried's lawyers contended that their client is not the one moving the crypto around and claimed they notified the government about the situation — an assertion of innocence that the suspect previously echoed in a tweet.



 

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“The Southern District of New York is working around the clock to respond to the implosion of FTX. It is an all-hands-on-deck moment,” Williams said in a statement. “We are launching the SDNY FTX Task Force to ensure that this urgent work continues, powered by all of SDNY’s resources and expertise until justice is done,” the outlet mentioned. Following the suspect's arrest on December 13, federal prosecutors stated that two of Bankman-Fried's co-conspirators had pled guilty to fraud charges for their participation in the conspiracy and promised to help federal authorities.

The alleged fraudster has been living at his parents’ Joseph Bankman and Barbara Fried’s residence, in California since his release on bail. He was spotted in an exclusive neighborhood on the edge of Stanford University’s campus. Assistant US Attorney Nicolas Roos on Thursday said Bankman-Fried “perpetrated a fraud of epic proportions” by allegedly swindling investors and looting customer deposits on his FTX trading platform as it crumbled.

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