FTX founder Sam Bankman-Fried pleads not responsible to fraud

Samuel Bankman-Fried leaves Manhattan federal court in New York on January 3, 2023.

Samuel Bankman-Fried leaves Manhattan federal courtroom in New York on January 3, 2023.
| Photograph Credit score: AP

FTX founder Sam Bankman-Fried pleaded not responsible in Manhattan federal courtroom on January 3 to fees that he cheated buyers and looted buyer deposits on his cryptocurrency buying and selling platform as a choose set a tentative trial date for October.

Mr. Bankman-Fried (30) denied fees accusing him of illegally diverting large sums of buyer cash from FTX to make lavish actual property purchases, donate cash to politicians and make dangerous trades at Alameda Analysis, his cryptocurrency hedge fund buying and selling agency.

Mr. Bankman-Fried’s lawyer, Mark Cohen, introduced his consumer’s plea, saying: “He pleads not responsible to all counts.”

Afterward, Decide Lewis A. Kaplan set a tentative trial date of October 2, saying he would possibly transfer it ahead or backward a day or two. A prosecutor estimated it could take the federal government a month to current its case to a jury, whereas a protection lawyer projected placing on a case lasting two to a few weeks.

Sporting a backpack, Mr. Bankman-Fried marched by means of a crush of cameras as he entered the courthouse on a wet day to make his first look earlier than Mr. Kaplan. Within the courtroom, Mr. Bankman-Fried appeared relaxed by means of many of the half-hour-long continuing, sometimes chatting with a lawyer subsequent to him. When he left courtroom, he didn’t converse to reporters outdoors.

After Mr. Bankman Fried pleaded not responsible, the choose mentioned with attorneys a schedule for continuing towards trial, setting April dates for protection attorneys to submit arguments difficult the validity of the fees and for prosecutors to reply to them. Oral arguments had been set for Could 18.

The choose additionally added to Mr. Bankman-Fried’s bail situations by banning him from accessing or transferring cryptocurrency or property of FTX or Alameda Analysis or any property bought with funds from the businesses.

He did so after Assistant U.S. Lawyer Danielle Sassoon stated Mr. Bankman-Fried had labored with international regulators to switch FTX property to them after FTX declared chapter and he knew U.S. chapter authorities had been additionally taken with these property.

Ms. Sassoon stated Mr. Bankman-Fried expressed to a co-conspirator that he knew there was competitors between U.S. chapter authorities and international regulators and he wished to get the property to the international regulators partly as a result of he thought they’d be extra lenient with him and he would possibly have the ability to regain management of his enterprise.

Mr. Cohen, although, insisted that Mr. Bankman-Fried had not personally transferred any property and that something that was moved got here on the insistence of a courtroom within the Bahamas that ordered it to happen.

Ms. Sassoon, noting FTX was the second largest cryptocurrency trade, additionally advised the choose that the federal government hoped to create an internet site for victims of the fraud, relatively than notify them individually since they could quantity over a million.

Previous to Mr. Bankman-Fried’s look, his attorneys despatched a letter to the choose, saying Mr. Bankman-Fried’s dad and mom — each Stanford Regulation College professors, in latest weeks have develop into the goal of “intense media scrutiny, harassment, and threats. They stated the dad and mom had obtained “a gentle stream of threatening correspondence, together with communications expressing a want that they undergo bodily hurt.”

Consequently, the attorneys requested that the names be redacted on courtroom paperwork for 2 people who had been lined as much as signal Mr. Bankman-Fried’s $250 million private recognizance bond. Mr. Bankman-Fried was launched with digital monitoring about two weeks in the past on the situation that he await trial at his dad and mom’ home in Palo Alto, California.

The choose allowed the names to stay secret for now, however he stated he might rethink his determination if members of the media or others object.

Carolyn Ellison, 28, who ran Alameda, and Gary Wang, 29, who co-founded FTX, have pleaded responsible to fraud fees and are cooperating with prosecutors in a bid for leniency. Each are free on bail.

Their pleas had been stored secret till Mr. Bankman-Fried was within the air after his extradition from the Bahamas, the place FTX relies, attributable to fears that he would possibly flee.

Shortly earlier than Mr. Bankman-Fried’s arraignment, U.S. Lawyer Damian Williams introduced that he was launching a job pressure made up of senior prosecutors in his workplace to analyze and prosecute issues associated to the FTX collapse. He stated the duty pressure additionally will work to hint and get better sufferer property.

“The Southern District of New York is working across the clock to reply to the implosion of FTX,” Mr. Williams stated in a press launch. “It’s an all-hands-on-deck second. We’re launching the SDNY FTX Activity Pressure to make sure that this pressing work continues, powered by all of SDNY’s assets and experience, till justice is completed.”