Sam Bankman-Fried pleads not guilty to fraud in FTX case

Former FTX CEO Sam Bankman-Fried pleaded not guilty in court on Tuesday, January 3 to defrauding investors of his bankrupt crypto exchange and causing billions of dollars in losses. informs Reuters.

Federal prosecutors brought eight charges against him, including fraud and conspiracy to launder money. Bankman-Fried is also accused of misusing FTX client funds to support his Alameda Research hedge fund, real estate purchases, and multimillion-dollar political donations.

U.S. District Judge Lewis Kaplan has set the Bankman-Freed trial date for October 2, 2023. Until that time, prosecutors must prove the guilt of the former head of FTX. The government has strong evidence, and hundreds of thousands of documents will be handed over to the defense in the coming weeks, federal prosecutor Danielle Sassoon said.

Authorities have already secured guilty pleas from FTX co-founder Gary Wang and ex-head of Alameda Research Caroline Ellison. Both of them are cooperating with the investigation and can testify at the trial. If convicted, Bankman-Fried could face up to 115 years in prison. He has previously admitted to making mistakes with FTX, but does not plead guilty to any criminal offences.

Since being released on $250 million bail on December 22, Bankman-Freed has been under house arrest at the home of his parents, Joseph Bankman and Barbara Freed, professors at Stanford Law School in California. On Jan. 4, a judge imposed a new bail condition: Bankman-Freed cannot access FTX or Alameda’s assets.

This happened after the prosecutor accused Bankman-Fried of seeking to transfer assets to another country. In addition, a report is now being verified that funds were transferred from Alameda cryptocurrency wallets at the end of last month. At the same time, according to Sassoon, there is no evidence that these operations were carried out by Bankman-Freed.

Bankman-Fried’s lawyer Mark Cohen said his client “did not make” the transfers from Alameda. The defense also said that Bankman-Fried’s parents, who signed bail documents, received death threats. As such, the identities of the other signatories will remain undisclosed, as they may also face similar persecution.

The FTX embezzlement and manipulation scheme was exposed in an SEC lawsuit filed against Wang and Allison in December. The former CEOs of the group used FTX clients to cover Alameda’s shortfall, manipulated the price of the FTT token, and used technical means to cover up their actions.

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