Disgraced former FTX CEO Sam Bankman-Fried pleaded not guilty to criminal charges of fraud, conspiracy, campaign finance law violations, and money laundering in a New York federal court, setting up a legal battle with his former business partners.
- Sam Bankman-Fried pleaded not guilty to criminal charges.
- The trial date is set for October 2, 2023.
- Bankman-Fried's attorneys requested that the names of the two people who will sign on as sureties for his $250 million bail package be redacted.
Business Partners Admit Fraud
The judge set a trial date for Oct. 2, 2023. If convicted, Bankman-Fried could face up to 115 years.
Bankman-Fried is accused of stealing customer funds from FTX to cover loans taken out by Alameda Research, FTX’s affiliated crypto hedge fund. It is alleged he used the funds to invest in other companies, donate to political campaigns, and use them for his own benefit.
Gary Wang, the co-founder of FTX, and Caroline Ellison, who served as Alameda’s CEO, have both pleaded guilty to multiple criminal charges and are cooperating with federal prosecutors. Ellison has admitted to concealing billions of dollars in loans for FTX.
"We prepared certain quarterly balance sheets that concealed the extent of Alameda's borrowing and the billions of dollars in loans that Alameda had made to FTX executives and to related parties," Ellison told U.S. District Judge Ronnie Abrams in Manhattan federal court.
Wang said he was directed to make changes to FTX's code to give Alameda special privileges on the trading platform while being aware that others were telling investors and customers that Alameda had no such privileges.
Attorney Requests Redaction of Names
Bankman-Fried is out on a $250 million bail package and is under house arrest at his parents' home in California. He was arraigned in federal court in Manhattan, where his attorney Mark Cohen entered the plea of not guilty to all counts. In a letter filed on Tuesday, Bankman-Fried's attorneys requested that the names of the two people who will sign on as sureties for his $250 million bail package be redacted.
The attorneys for Bankman-Fried wrote that if the identities of the two remaining surities are revealed in public, they will likely be targeted for harassment and media scrutiny, and their safety and privacy will be compromised.
Bankman-Fried’s parents, who co-signed the bond, have been receiving physical threats since FTX's collapse, according to attorneys.
The Bottom Line
Bankman-Fried’s not-guilty plea puts him at odds with his former business partners, who have already admitted to fraud and the concealment of funds. Both Ellison and Gary Wang are cooperating with prosecutors as part of their plea agreements.