Bankman-Fried pleads not guilty to criminal charges in New York
NEW YORK — FTX founder Sam Bankman-Fried pleaded not guilty in federal court in Manhattan on Tuesday to criminal charges alleging the disgraced crypto industry titan led a massive international scheme that siphoned billions of dollars from consumers and investors.
The 30-year-old onetime political megadonor faces eight counts of wire fraud, money laundering and campaign finance violations and could spend decades in prison if he's convicted.
Federal prosecutor Danielle Sassoon said during the arraignment hearing that the evidence will show Bankman-Fried oversaw a “wide-ranging fraud” that used billions of dollars in FTX customer crypto assets to prop up his affiliated hedge fund, Alameda Research. Stolen customer funds were routinely laundered through philanthropic donations, political contributions and venture investments, Sassoon said.
Judge Lewis Kaplan of the Southern District of New York set a tentative date of Oct. 2 for the trial. Prosecutors are expected to provide evidence to Bankman-Fried's defense team within the next four weeks, though more could be uncovered as investigators continue to dig through his complex network of investments and holding companies.
Prior to FTX’s bankruptcy in November and his subsequent arrest in the Bahamas, Bankman-Fried was one of the crypto industry’s most celebrated success stories. The MIT graduate was a regular presence in Washington and, along with other FTX executives, a prominent political donor who spent millions on an influence campaign designed to sway lawmakers and regulators on regulation.
His downfall led to a collapse in crypto prices that destabilized several major industry startups, including prominent digital asset lenders and brokerages that provide services to millions of retail investors.
Bankman-Fried was arrested in the Bahamas last month at the request of federal prosecutors. He was later extradited and released on a $250 million bond to his parents' home in California.
Clad in a dark suit and a hastily tied blue tie with white spots, Bankman-Fried did not speak during the hearing — only occasionally whispering to his attorney Mark Cohen as prosecutors successfully argued for tighter bail conditions that prohibit him from accessing or transferring any assets belonging to the failed crypto exchange and Alameda.
Kaplan imposed the new requirements after a little more than $1 million in crypto assets were moved from digital wallets belonging to Alameda late last week. Cohen said the defense had notified the government that the FTX founder had not made the transfers.
Kaplan also granted a motion submitted by Cohen to redact any identifying information for two co-signers on the $250 million bond, which is partially secured by his parents' home. Kaplan said media organizations and members of the public may challenge that order.