Sam Bankman-Fried pleads not guilty in FTX fraud case

Former chief executive could receive up to 115 years in prison if convicted

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Disgraced former cryptocurrency tycoon Sam Bankman-Fried on Tuesday pleaded not guilty to criminal charges after being accused of cheating investors through his now-bankrupt FTX crypto exchange platform.

Mr Bankman-Fried is accused of stealing billions of dollars in FTX customer deposits to support his Alameda Research hedge fund, to buy real estate and to make political contributions in what prosecutors have called a fraud of epic proportions.

Entering his plea through his lawyer, the 30-year-old is charged with eight criminal counts, including wire fraud and conspiracy to commit money laundering in a federal court. He could receive up to 115 years in prison if convicted.

Mr Bankman-Fried entered the courthouse wearing a blue suit, white shirt and dotted blue tie, carrying a backpack.

The Massachusetts Institute of Technology graduate rode a boom in the value of Bitcoin and other digital assets to build a net worth of an estimated $26 billion. He eventually became an influential political donor in the US.

But FTX collapsed in early November after a wave of withdrawals and consequently declared bankruptcy on November 11, wiping out Mr Bankman-Fried's fortune. He later said he had $100,000 in his bank account.

Mr Bankman-Fried was extradited last month from the Bahamas, where he had been living and where the exchange was based.

Since his release on bond on December 22, Mr Bankman-Fried has been subject to electronic monitoring and required to live with his parents, both professors at Stanford Law School in California.

The prosecution case was strengthened by guilty pleas issued last month by two of Mr Bankman-Fried's closest associates.

Caroline Ellison, who was Alameda's chief executive, and Gary Wang, FTX's former chief technology officer, pleaded guilty to seven and four criminal charges, respectively, and agreed to co-operate with prosecutors.

Mr Bankman-Fried, Ellison and Wang were also sued by the US Securities and Exchange Commission and the Commodity Futures Trading Commission. Ellison and Wang have settled those civil cases.

FTX's new chief executive, John Ray, known for his work on Enron Corporation's bankruptcy, has said the company was run by “grossly inexperienced” and unsophisticated people.

Reuters contributed to this report

Updated: January 04, 2023, 2:44 AM
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