Sam Bankman-Fried, the founder of bankrupt cryptocurrency exchange FTX, on Tuesday pleaded not guilty to charges that he defrauded customers out of millions of dollars worth of digital assets.
Wearing a backpack, Bankman-Fried marched through a sea of cameras as he entered the courthouse on a rainy day to stand before Judge Lewis A. Kaplan. Bankman-Fried’s attorney, Mark Cohen, announced his client’s plea, saying: “He pleads not guilty to all counts.”
The U.S. Attorney’s Office for the Southern District of New York has charged Bankman-Fried with eight counts of fraud, money laundering and other financial crimes. Bankman-Fried, who stepped down as FTX’s CEO in November, also violated political contribution laws by donating to candidates and committees in New York under another person’s name, authorities said.
More specifically, prosecutors alleged that Bankman-Fried duped customers by using their crypto assets to pay for debts and expenses incurred by FTX’s hedge fund, Alameda Research. Bankman-Fried and other top executives committed commodities and securities fraud as well as created false financial records about Alameda Research to defraud lenders, prosecutors said in an indictment unsealed last month.
Prior to his appearance, his lawyers sent a letter to the judge, saying Bankman-Fried’s parents in recent weeks have become the target of “intense media scrutiny, harassment and threats, including communications expressing a desire that they suffer physical harm.”
As a result, the lawyers requested that the names be redacted on court documents for the two individuals who were lined up to sign Bankman-Fried’s $250 million personal recognizance bond. He was released with electronic monitoring about two weeks ago on the condition that he await trial at his parents’ house in Palo Alto, California.
Legal experts expect a prolonged court battle, with prosecutors needing to to prove Bankman-Fried intentionally swindled FTX customers.
Gary Wang, who co-founded the company, and former Alameda CEO Carolyn Ellison have already pleaded guilty to fraud charges. Ellison and Wang are expected to serve as government witnesses during Bankman-Fried’s trial, federal prosecutors said last month.
The Associated Press contributed to this report.
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