Sam Bankman-Fried pleads not guilty to charges he defrauded FTX customers
Sam Bankman-Fried, the founder of bankrupt cryptocurrency exchange FTX, on Tuesday pleaded not guilty to charges that he defrauded customers out of millions of dollars worth of digital assets.
Wearing a backpack, Bankman-Fried made his way through a sea of cameras as he entered the Manhattan courthouse on a rainy day to stand before U.S. District Judge Lewis Kaplan. Bankman-Fried sat silent in the court room while attorney Mark Cohen announced his client's plea.
"He pleads not guilty to all counts," Cohen said.
Judge Kaplan set a tentative trial date of Oct. 2.
The U.S. Attorney's Office for the Southern District of New York has charged Bankman-Fried with eight counts of fraud, money laundering and other financial crimes. Bankman-Fried, who stepped down as FTX's CEO in November, also violated political contribution laws by donating to candidates and committees in New York under another person's name, authorities said.
More specifically, prosecutors alleged that Bankman-Fried duped customers by using their crypto assets to pay for debts and expenses incurred by FTX's hedge fund, Alameda Research. Bankman-Fried and other top executives committed commodities and securities fraud as well as created false financial records about Alameda Research to defraud lenders, prosecutors said in an indictment unsealed last month.
Prior to his appearance, his lawyers sent a letter to the judge, saying Bankman-Fried's parents in recent weeks have become the target of "intense media scrutiny, harassment and threats, including communications expressing a desire that they suffer physical harm."
As a result, the lawyers requested that the names be redacted on court documents for the two individuals who were lined up to sign Bankman-Fried's $250 million personal recognizance bond. He was released with electronic monitoring about two weeks ago on the condition that he await trial at his parents' house in California.
Bankman-Fried, 30, spent most of 2022 in the Bahamas, where his company is based. After U.S. prosecutors announced charges against Bankman-Fried, Bahamian authorities extradited him stateside. Securities regulators in the Bahamas said last week that they seized about $3.5 billion worth of crypto assets from the FTX platform "for safekeeping."
Legal experts expect a prolonged court battle, with prosecutors needing to to prove Bankman-Fried intentionally swindled FTX customers.
Gary Wang, who co-founded the company, and former Alameda CEO Carolyn Ellison have already pleaded guilty to fraud charges. Ellison and Wang are expected to serve as government witnesses during Bankman-Fried's trial, federal prosecutors said last month.
The Associated Press contributed to this report.
- In:
- Sam Bankman-Fried
- Cryptocurrency
- FTX
Khristopher J. Brooks is a reporter for CBS MoneyWatch covering business, consumer and financial stories that range from economic inequality and housing issues to bankruptcies and the business of sports.
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