Sam Bankman-Fried pleaded not responsible on Tuesday to legal fees that he cheated buyers in his now-bankrupt FTX cryptocurrency change and precipitated billions of {dollars} in losses, in what prosecutors have referred to as an “epic” fraud.
He entered his plea in Manhattan federal court docket the place he faces eight legal counts, together with wire fraud and cash laundering conspiracy. The 30-year-old ex-mogul is accused of looting FTX clients’ deposits to assist his Alameda Analysis hedge fund, purchase actual property and donate hundreds of thousands of {dollars} to political causes.
“Buyer funds had been additionally used and laundered via political donations, charitable donations and quite a lot of enterprise investments,” Danielle Sassoon, a federal prosecutor, stated on the listening to.
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Sassoon steered that the federal government has a deep nicely of proof towards Bankman-Fried, saying prosecutors will flip over a whole lot of 1000’s of paperwork in coming weeks to the protection.
U.S. District Choose Lewis Kaplan on Tuesday set an Oct. 2 date for trial, which Sassoon stated might final 4 weeks.
The federal government has already secured responsible pleas from two former high associates of Bankman-Fried’s – former Alameda chief govt Caroline Ellison and former FTX chief know-how officer Gary Wang – who’re cooperating with prosecutors and will testify at trial.
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A clean-shaven Bankman-Fried wore a blue go well with, white shirt and dotted blue tie and carried a backpack into the courthouse – a far cry from the shorts and t-shirts that had been his most well-liked apparel when he ran FTX from the Bahamas.
Bankman-Fried didn’t communicate to the choose throughout the listening to, however conferred privately along with his legal professionals. He shook arms with one of many prosecutors earlier than the arraignment. When it ended, he approached the handful of courtroom sketch artists and commented on their work.
The Massachusetts Institute of Expertise graduate might withstand 115 years in jail if convicted. He has beforehand acknowledged making errors at FTX however stated he doesn’t consider he has legal legal responsibility.
‘MORE LENIENT’
Bankman-Fried rode a growth within the worth of bitcoin and different digital property to construct a web value of an estimated $26 billion and change into an influential political donor in the USA.
FTX collapsed in early November after a wave of withdrawals and declared chapter on Nov. 11, wiping out Bankman-Fried’s fortune. He later stated he had $100,000 in his checking account.
He was extradited final month from the Bahamas, the place he lived and the place the change was primarily based.
Since his launch on a $250 million bond on Dec. 22, Bankman-Fried has been topic to digital monitoring and required to dwell along with his dad and mom, Joseph Bankman and Barbara Fried, each professors at Stanford Regulation College in California. Fried attended her son’s listening to on Tuesday.
On Tuesday, Kaplan imposed a brand new bail situation, saying Bankman-Fried can’t entry FTX or Alameda property.
That got here after Sassoon accused Bankman-Fried of searching for to switch property to an unnamed overseas nation that he thought can be “extra lenient.” She stated prosecutors had been additionally probing stories late final month that funds had been transferred out of Alameda cryptocurrency wallets, although she stated there was not proof Bankman-Fried executed these transactions.
Mark Cohen, Bankman-Fried’s lawyer, stated his shopper “didn’t make” the Alameda transfers. Referring to the accusation that Bankman-Fried sought to switch cash abroad, he stated his shopper had sought to adjust to a court docket order within the Bahamas, which final month briefly seized some FTX property.
The Securities Fee of the Bahamas (SCB) – the Caribbean nation’s monetary regulator – didn’t instantly reply to a request for remark.
The SCB in November directed Bankman-Fried and Wang to switch property underneath their management, the fee’s govt director, Christina Rolle, stated in a Dec. 29 affidavit filed within the Bahamas Supreme Court docket. The Bahamas has appointed liquidators to wind down FTX’s worldwide buying and selling enterprise.
Kaplan on Tuesday additionally granted Bankman-Fried’s request to not publicize the names of two further co-signers for the bond.
Attorneys for Bankman-Fried have stated his dad and mom, who co-signed the bond, have acquired bodily threats since FTX’s collapse, and that different co-signers may face comparable harassment.