FTX founder Sam Bankman-Fried pleads not guilty in fraud case - Action News
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FTX founder Sam Bankman-Fried pleads not guilty in fraud case

Sam Bankman-Fried pleaded not guilty on Tuesday to criminal charges that he cheated investors in his now-bankrupt FTX cryptocurrency exchange.

Bankman-Fried appeared before U.S. district judge in Manhattan on Tuesday

A man with curly hair exits a black car.
Former FTX chief executive Sam Bankman-Fried arrives at federal court in Manhattan for a hearing on Tuesday. He pleaded not guilty to eight criminal counts including wire fraud and conspiracy to commit money laundering over the collapse of the bankrupt cryptocurrency exchange. (David Dee Delgado/Reuters)

Sam Bankman-Fried pleaded not guilty on Tuesday to criminal charges that he cheated investors in his now-bankrupt FTX cryptocurrency exchange.

Bankman-Fried is accused of looting billions of dollars in 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.

The 30-year-old defendant entered the plea through his lawyer to eight criminal counts, including wire fraud and conspiracy to commit money laundering, before U.S. District Judge Lewis Kaplan in Manhattan federal court.

It is common for criminal defendants to initially plead not guilty. They may change their pleas later.

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

Federal prosecutor Danielle Sassoon told the judge that prosecutors and defence lawyers have discussed a possible September or October trial date. She said a trial could last four weeks.

Bankman-Fried, a Massachusetts Institute of Technology graduate, rode a boom in the value of bitcoin and other digital assets to build a net worth of an estimated $26 billion US and become an influential political donor in the United States.

But FTX collapsed in early November after a wave of withdrawals and declared bankruptcy on Nov. 11, wiping out Bankman-Fried's fortune. He later said he had $100,000 in his bank account.

Closest associates pleaded guilty last month

Bankman-Fried was extradited to the U.S. last month from the Bahamas, where he lived and where the exchange was based.

Since his release on a $250-million bond on Dec. 22, Bankman-Fried has been subject to electronic monitoring and required to live with his parents, Joseph Bankman and Barbara Fried, both professors at Stanford Law School in California.

WATCH | Bail for FTX founder Sam Bankman-Fried:

FTX founder Sam Bankman-Fried freed on $250M US bail

2 years ago
Duration 2:55
FTX founder Sam Bankman-Fried will be released on a $250 million US bond package while he awaits trial on fraud charges related to the collapse of the FTX crypto exchange, a federal magistrate judge said on Thursday.

Kaplan granted Bankman-Fried's request not to publicize the names of two additional co-signers for the bond.

Lawyers for Bankman-Fried have said his parents, who co-signed the bond, have been receiving physical threats since FTX's collapseand that other co-signers might face similar harassment unless their names were kept secret.

The judge also imposed a new bail condition, saying Bankman-Fried cannot access FTX or Alameda assets.

A man in a suit jacket and white shirt.
Bankman-Fried is shown leaving the Manhattan federal courthouse in New York City after securing bail on Dec. 22, 2022. (Jeenah Moon/Reuters)

The prosecutors' 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 co-operate with prosecutors.

Bankman-Fried, Ellison and Wang were also sued by the U.S. Securities and Exchange Commission and the Commodity Futures Trading Commission. Ellison and Wang settled those civil cases.

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