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Monday, May 20, 2024

Disgraced FTX founder Sam Bankman-Fried pleads not guilty to fraud

Disgraced FTX founder Sam Bankman-Fried pleads not guilty to fraud

Sam Bankman-Fried's star-studded cryptocurrency exchange FTX spectacularly collapsed two months ago. Its downfall was quickly followed by the arrest of its founder, who stands accused of "one of the biggest financial frauds in American history".
Disgraced FTX founder Sam Bankman-Fried has pleaded not guilty to stealing billions of dollars of customer money in his first court appearance since he was released on a record $250m pretrial bail.

Bankman-Fried, 30, entered his plea before US district judge Lewis Kaplan at a court in Manhattan, after spending the Christmas period under house arrest at his parents' home in California.

After the collapse of his star-studded £21bn crypto empire in November, Bankman-Fried was arrested in the Bahamas, where his now-defunct company was based.

The former billionaire has been charged by the US Securities and Exchange Commission (SEC) with fraud and violating campaign finance laws.

If convicted, he could be jailed for up to 115 years.

He is also being sued over what prosecutors say is "one of the biggest financial frauds in American history".

It is alleged that he used FTX customer deposits to support his Alameda Research hedge fund, buy real estate and make millions of dollars in political contributions.

Between FTX filing for bankruptcy and his arrest, Bankman-Fried made several media appearances in which he admitted mistakes in his running of the crypto exchange, but denied he was criminally liable.

Bankman-Fried's plea comes after two of his closest associates pleaded guilty last month.

Caroline Ellison, who was Alameda's chief executive, admitted seven criminal charges last month, while FTX's former chief technology officer Gary Wang admitted four.

Both also agreed to cooperate with prosecutors and settled civil cases with the SEC.

FTX's new chief executive, John Ray, has said the company was run by "grossly inexperienced" people.
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