Tech News

Former FTX CEO SBF pleads not guilty to US criminal charges


FTX founder and former CEO Sam Bankman-Fried plead not guilty to all eight counts of U.S. criminal charges on Tuesday.

Bankman-Fried appeared before a judge in the U.S. District Court in New York City on Tuesday with his lawyers, Mark Cohen and Christian Everdell. Criminal charges against the 30-year-old former billionaire include wire fraud, conspiracy to commit money laundering and conspiracy to misuse customer funds, among others. The former FTX CEO is also facing suits by the SEC and CFTC over similar charges.

Prior to the announcement, Bankman-Fried was expected to plead not guilty. This decision could turn into a lengthy legal battle, and he could face up to 115 years in jail if convicted on all charges. His trial date has been set for October 2, 2023.

In late December, FTX co-founder and former CTO Gary Wang and Alameda Research CEO Caroline Ellison both plead guilty to federal criminal charges in relation to the FTX collapse. The two are also facing civil penalties from the SEC and CFTC alongside the criminal charges. Wang and Ellison plan to cooperate with prosecutors and will be major witnesses given their close ties to both Bankman-Fried and FTX and its affiliated crypto hedge fund Alameda.

Last month, a U.S. judge released Bankman-Fried on a $250 million bail bond after he was extradited to America from the Bahamas. The bail package allowed Bankman-Fried to remain under house arrest at his parents’ home in Palo Alto, California.

Bankman-Fried’s lawyers also filed a letter to the Manhattan federal court on Tuesday seeking redactions of the names of two individuals who intend to help secure his multimillion dollar bail in attempts to protect them from public attention.

The lawyers argued there’s no need for public disclosure after his parents “have in recent weeks become the target of intense media scrutiny, harassment, and threats. Among other things, Mr. Bankman-Fried’s parents have received a steady stream of threatening correspondence, including communications expressing a desire that they suffer physical harm.”

SBF’s representation argued there is, accordingly, “serious cause for concern” for additional retaliation for others involved in the bond.

Advertisement

It has been a little under two months since the once-major crypto exchange FTX filed for Chapter 11 bankruptcy and Bankman-Fried stepped down as CEO, only to be replaced by Enron turnaround veteran John J. Ray III.

On December 13, the U.S. House Financial Services Committee held its first hearing focused on FTX’s collapse. Ray sat as the only witness for the hearing as Bankman-Fried, who was originally scheduled to testify, was unable to join after being arrested in the Bahamas.

During the four-hour hearing, Ray’s testimony addressed a number of aspects in the situation from the extent to which customer funds were misused, to internal operations — or lack thereof.

When asked if FTX had significant risk management systems, Ray said at the time, “there were virtually no internal controls and no separateness whatsoever.”

Later in the hearing, Ray disclosed that there was no board overseeing FTX, aside from Bankman-Fried. FTX, once valued at $32 billion, didn’t have an accounting or human resources department. It did, however, have a legal department and employees with compliance titles — but no department for them to call home.

As it stands, Bankman-Fried’s plea is a risky move as he diverts from his former colleagues who plead guilty. In general, many crypto community members view Bankman-Fried’s attitude as cocky — given the media tour he went on before being arrested where he appeared on network shows like “Good Morning America” to platforms as niche as crypto-focused Twitter spaces.

This is a developing story and may be updated.

Related Articles

Back to top button