After Being 'Sorry' For FTX Collapse, Former CEO Sam Bankman-Fried Pleads 'Not Guilty' In Court

Amidst the possibility of facing up to 115 years in jail, bankrupt crypto exchange FTX's former CEO, Sam Bankman-Fried, pleaded not guilty in court yesterday. This comes about two months after he apologised and said "sorry" to the crypto exchange's investors for FTX's collapse.

He is accused of criminal charges that he cheated investors and caused billions of dollars in losses in what prosecutors have called an "epic" fraud.

8 Criminal Accusations Against Him

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Sam Bankman-Fried entered his plea in Manhattan federal court, where he faces eight criminal counts, including wire fraud and money laundering conspiracy. The 30-year-old is accused of looting FTX customers' deposits to support his Alameda Research hedge fund, buy real estate, and donate millions of dollars to political causes.

"Customer funds were also used and laundered through political donations, charitable donations and a variety of venture investments," Danielle Sassoon, a federal prosecutor, said at the hearing, as per a Reuters report.

Prosecutor Sassoon suggested that the government has a deep well of evidence against Bankman-Fried, saying prosecutors will turn over hundreds of thousands of documents to the defence in the coming weeks.

U.S. District Judge Lewis Kaplan on Tuesday set an October 2 date for trial, which Sassoon said could last four weeks.

The government has already obtained guilty pleas from two of Bankman-Fried's former top associates, former Alameda Chief Executive Caroline Ellison and former FTX Chief Technology Officer Gary Wang, who are cooperating with prosecutors and may testify at trial.

Also Read: Mystery Of Terra Luna Crash Deepens After FTX Collapse

"I am Sorry"

When FTX began to collapse in early November last year, FTX's then CEO, Sam Bankman Fried (SFB), apologised through a tweet on November 10th.

2) I also should have been communicating more very recently.

Transparently--my hands were tied during the duration of the possible Binance deal; I wasn't particularly allowed to say much publicly. But of course it's on me that we ended up there in the first place.

¡ª SBF (@SBF_FTX) November 10, 2022

And now, his pleading "not guilty" is in sharp contrast to his apology. And with the court's trial date still quite far away (October 2023), it remains to be seen how this case turns out until then.

The Courtroom Saga

30-year-old clean-shaven Bankman-Fried reportedly wore a blue suit, white shirt, and dotted blue tie and carried a backpack into the courthouse, a far cry from his popular usual shorts and t-shirts that were his preferred attire when he ran FTX from the Bahamas.

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Bankman-Fried did not speak to the judge during the hearing but conferred privately with his lawyers. He shook hands with one of the prosecutors before the arraignment. When it ended, he approached the handful of courtroom sketch artists and commented on their work.

The Crypto Billionaire's Fall

In the last few years, "crypto-robinhood" pioneer Bankman-Fried rode a boom in the value of bitcoin and other digital assets to build a net worth of an estimated $26 billion and become an influential political donor in the United States.

After a wave of withdrawals, FTX collapsed in early November last year and declared bankruptcy on November 11, wiping out the fortune of then-30-year-old "billionaire" Bankman-Fried.He later said he had just $100,000 left in his bank account.

He was extradited last month from the Bahamas, where he lived and where the exchange was based. Since his release on a $250 million bond on December 22, Bankman-Fried has been subject to electronic monitoring and required to live with his parents, Joseph Bankman and Barbara Fried, both professors at Stanford Law School in California. Fried attended her son's hearing on Tuesday.

Also Read: Why Goldman Sachs Is On The Hunt To Invest Millions In Crypto

New Bail Condition Post $250 Million Release Bond

On Tuesday, U.S. District Judge Kaplan imposed a new bail condition, saying Bankman-Fried cannot access FTX or Alameda assets, as per the report.

AFP

That came after Sassoon accused Bankman-Fried of seeking to transfer assets to an unnamed foreign country that he thought would be "more lenient." She said prosecutors were also probing reports from late last month that funds were transferred out of Alameda cryptocurrency wallets, though she said there was not evidence Bankman-Fried executed those transactions.

Mark Cohen, Bankman-Fried's lawyer, said his client "did not make" the Alameda transfers. Referring to the accusation that Bankman-Fried sought to transfer money overseas, he said his client had sought to comply with a court order in the Bahamas, which last month temporarily seized some FTX assets.

Request To Not Publicise Other Names

On Tuesday, Judge Kaplan granted Bankman-Fried's request that the names of two additional co-signers for the bond not be made public.

Lawyers for Bankman-Fried have said that his parents, who co-signed the bond, have received physical threats since FTX's collapse, and that other co-signers might face similar harassment.

Also Read: Binance Backs Out Of Rival FTX Acquisition Deal

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