FTX Founder Sam Bankman-fried Pleads Not Guilty: In federal court in New York on Tuesday, Sam Bankman-Fried entered a not guilty plea to eight charges relating to the failure of his former cryptocurrency exchange FTX and hedge fund Alameda Research.
The former crypto billionaire was charged with a conspiracy to commit securities fraud and wire fraud, separate counts of wire fraud and securities fraud, money laundering, and a plot to circumvent campaign funding laws. Photographers scrambled to get out of the way as Bankman-Fried was quickly dragged by security through the crowd and into the courthouse.
Bankman-counsel Fried’s submitted a motion earlier in the day to have the identities of the two people who had promised to see him released on bail with a bond sealed.
They argued that the guarantors shouldn’t be subjected to the same scrutiny because the defendant and the case’s public profile had already put Bankman-parents Fried’s at risk. In court, Kaplan granted the motion.
According to federal prosecutor Danielle Sassoon, Bankman-Fried coordinated with foreign officials to transfer assets that FTX’s American management had been attempting to recoup through the Chapter 11 bankruptcy procedure.
A battle over hundreds of millions, if not billions, of dollars worth of bitcoin has been going on in Delaware bankruptcy court for weeks between Bahamas regulators and FTX’s American attorneys.
Attorneys for FTX believe that Bankman-Fried helped Bahamian regulators transfer hundreds of millions of dollars illegally. Bahamian regulators contest the legitimacy of the Chapter 11 proceedings in the United States and assert that local laws grant them jurisdiction over those assets.
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The U.S. attorneys for FTX seem to concur with federal prosecutors. Sassoon requested that Kaplan establish a new prohibition against Bankman-Fried moving or gaining access to FTX client assets. The judge also granted such a motion.
On December 21, Bankman-Fried arrived back in the United States from the Bahamas. The next day, he was freed on a $250 million recognizance bond backed by his California family home.
In connection with their ongoing inquiry into Bankman-Fried and the demise of FTX, federal prosecutors recently announced the creation of a new task force to recover victim assets.
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U.S. Attorney Damian Williams stated on Tuesday, “The Southern District of New York is working around the clock to respond to the implosion of FTX.”
The SDNY U.S. attorney’s office had claimed that Bankman-Fried had spent $8 billion of client money on ostentatious real estate purchases and vanity projects, including stadium naming rights and millions in political contributions.
Federal prosecutors assembled the criminal charges against Bankman-Fried, 30, in the indictment against her in a couple of weeks, which is unusually quick.
The Securities and Exchange Commission and the Commodity Futures Trading Commission have filed complaints along with the federal allegations.
Two of Bankman-closest Fried’s allies, Gary Wang, who co-founded FTX with Bankman-Fried, and Caroline Ellison, the former CEO of his hedge fund Alameda Research, helped them.
On December 21, Ellison, 28, and Wang, 29, entered guilty pleas. Following widespread rumors that Ellison, Bankman-former Fried’s romantic partner, was aiding federal investigations, their plea agreements with prosecutors were reached.
Ryan Salame, another ex-FTX executive, is believed to have informed officials about potential wrongdoing within FTX first. Two days before the cryptocurrency exchange sought bankruptcy protection, Salame, a former co-CEO at FTX, alerted Bahamian officials about “potential misuse of clients’ money,” according to a document by the Securities Commission of the Bahamas.
According to the SEC, federal law enforcement and banking officials charged Bankman-Fried with committing one of the biggest and most “brazen” scams in recent memory. Reporting that cast doubt on the make-up of his hedge fund’s balance sheet led to his spectacular fall.
The breadth of Bankman-alleged Fried’s misconduct has come to light in the weeks since FTX filed for bankruptcy on November 11 in Delaware. John J. Ray, the new CEO, declared that corporate control “completely failed.”
On Dec. 9, Bankman-Fried was charged in federal court in New York; on Dec. 12, at the request of American prosecutors, Bahamas law enforcement detained Bankman-Fried.
Bankman-legal Fried’s team in the Bahamas wavered after his indictment on whether or not their client would agree to extradition. On October 2, the trial will start.
In a black SUV, Bankman-Fried arrived outside the courthouse and was immediately surrounded by photographers. As cameras raced to get a look at Bankman-Fried, the crowd grew so dense that the woman couldn’t get out of the car and fell to the wet pavement.
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