- Former FTX CEO Sam Bankman-Fried pleaded not responsible to federal fees in New York on Tuesday, lower than two months after his crypto empire collapsed.
- Charges in opposition to Bankman-Fried embrace cash laundering, conspiracy to commit wire fraud and securities fraud.
- The case was assembled shortly by prosecutors from the Southern District of New York, who gained the cooperation of Bankman-Fried’s shut lieutenants Caroline Ellison and Gary Wang.
Sam Bankman-Fried pleaded not responsible in New York federal court docket Tuesday to eight fees associated to the collapse of his former crypto trade FTX and hedge fund Alameda Analysis.
The onetime crypto billionaire was indicted on fees of conspiracy to commit wire fraud and securities fraud, particular person fees of securities fraud and wire fraud, cash laundering and conspiracy to keep away from marketing campaign finance laws.
The trial will start on Oct. 2.
Bankman-Fried arrived outdoors the courthouse in a black SUV and was swarmed with cameras from the second his car arrived. The scrum grew so thick that Bankman-Fried’s mom was unable to exit the car, falling onto the moist pavement as cameras scrambled to catch a glimpse of her son.
Bankman-Fried was hauled by safety by means of the throng and into the courthouse in a matter of moments, with photographers scrambling to get out of the best way.
Earlier in the day, attorneys for Bankman-Fried filed a movement to seal the names of two people who had assured Bankman-Fried launch on bail with a bond. They claimed that the visibility of the case and the defendant had already posed a danger to Bankman-Fried’s dad and mom, and that the guarantors shouldn’t be topic to the identical scrutiny. Kaplan authorized the movement in court docket.
Federal prosecutor Danielle Sassoon advised the court docket that Bankman-Fried had labored with overseas regulators to switch property that FTX’s U.S. administration had been making an attempt to get well by means of the Chapter 11 chapter course of.
Regulators in the Bahamas and FTX’s U.S. attorneys have been preventing for weeks in Delaware chapter court docket over a whole lot of hundreds of thousands, if not billions, of {dollars} price of cryptocurrency. FTX’s attorneys insist that Bahamian regulators have illicitly transferred a whole lot of hundreds of thousands of {dollars}, and that Bankman-Fried assisted them.
Bahamian regulators say that native legal guidelines give them jurisdiction over these property, and dispute the validity of the U.S. Chapter 11 proceedings.
Federal prosecutors seem to agree with FTX’s U.S. attorneys. Sassoon requested Kaplan to impose a brand new restriction barring Bankman-Fried from transferring or accessing FTX buyer property. The choose authorized that movement as nicely.
Bankman-Fried returned to the U.S. from the Bahamas on Dec. 21, and the subsequent day was launched on a $250 million recognizance bond, secured by his household house in California.
Federal prosecutors additionally introduced the launch of a brand new process drive to get well sufferer property as a part of an ongoing investigation into Bankman-Fried and the collapse of FTX.
“The Southern District of New York is working around the clock to respond to the implosion of FTX,” U.S. Legal professional Damian Williams mentioned in a press release Tuesday.
The U.S. legal professional’s workplace for the SDNY had argued that Bankman-Fried used $8 billion worth of customer assets for extravagant real estate purchases and vanity projects, together with stadium naming rights and millions in political donations.
Federal prosecutors constructed the indictment in opposition to Bankman-Fried with uncommon pace, packaging collectively the prison fees in opposition to the 30-year-old in a matter of weeks. The federal fees got here alongside complaints from the Commodity Futures Trading Commission and the Securities and Exchange Commission.
They have been assisted by two of Bankman-Fried’s closest allies, Caroline Ellison, former CEO of his hedge fund Alameda Analysis, and Gary Wang, who co-founded FTX with Bankman-Fried.
Ellison, 28, and Wang, 29, pleaded guilty on Dec. 21. Their plea offers with prosecutors got here after rampant hypothesis that Ellison, Bankman-Fried’s onetime romantic companion, was cooperating with federal probes.
One other former FTX govt, Ryan Salame, apparently first alerted regulators to alleged wrongdoing inside FTX. Salame, a former co-CEO at FTX, flagged “possible mishandling of clients’ assets” to Bahamian regulators two days earlier than the crypto trade filed for chapter safety, in accordance to a submitting from the Securities Fee of the Bahamas.
Bankman-Fried was accused by federal regulation enforcement and monetary regulators of perpetrating what the SEC known as one of many largest and most “brazen” frauds in latest reminiscence. His gorgeous fall was precipitated by reporting that raised questions on the character of his hedge fund’s balance sheet.
Within the weeks since FTX’s Nov. 11 Delaware chapter submitting, the extent of Bankman-Fried’s alleged malfeasance has been uncovered. Alternative CEO John J. Ray mentioned there was a “complete failure of corporate control.“
Bankman-Fried was indicted in New York federal court docket on Dec. 9, and was arrested by Bahamas regulation enforcement on the request of U.S. prosecutors on Dec. 12. Following his indictment, Bankman-Fried’s authorized crew in the Bahamas flip-flopped on whether or not or not their consumer would consent to extradition.