FTX founder Sam Bankman-Fried pleads not responsible to fraud

NEW YORK — FTX founder Sam Bankman-Fried pleaded not responsible in Manhattan federal court docket Tuesday to costs that he cheated buyers and looted buyer deposits on his cryptocurrency buying and selling platform as a choose set a tentative trial date for October.

Bankman-Fried, 30, denied costs accusing him of illegally diverting huge sums of buyer cash from FTX to make lavish actual property purchases, donate cash to politicians and make dangerous trades at Alameda Analysis, his cryptocurrency hedge fund buying and selling agency.

Bankman-Fried’s lawyer, Mark Cohen, introduced his consumer’s plea, saying: “He pleads not responsible to all counts.”

Afterward, Choose Lewis A. Kaplan set a tentative trial date of Oct. 2, saying he may transfer it ahead or backward a day or two. A prosecutor estimated it will take the federal government a month to current its case to a jury, whereas a protection lawyer projected placing on a case lasting two to a few weeks.

Carrying a backpack, Bankman-Fried marched by a crush of cameras as he entered the courthouse on a wet day to make his first look earlier than Kaplan. Within the courtroom, Bankman-Fried appeared relaxed by many of the half-hour-long continuing, sometimes chatting with a lawyer subsequent to him. When he left court docket, he didn’t communicate to reporters exterior.

After Bankman Fried pleaded not responsible, the choose mentioned with attorneys a schedule for continuing towards trial, setting April dates for protection attorneys to submit arguments difficult the validity of the costs and for prosecutors to reply to them. Oral arguments had been set for Could 18.

The choose additionally added to Bankman-Fried’s bail circumstances by banning him from accessing or transferring cryptocurrency or belongings of FTX or Alameda Analysis or any belongings bought with funds from the businesses.

He did so after Assistant U.S. Lawyer Danielle Sassoon stated Bankman-Fried had labored with overseas regulators to switch FTX belongings to them after FTX declared chapter and he knew U.S. chapter authorities had been additionally concerned with these belongings.

Sassoon stated Bankman-Fried expressed to a co-conspirator that he knew there was competitors between U.S. chapter authorities and overseas regulators and he wished to get the belongings to the overseas regulators partially as a result of he thought they’d be extra lenient with him and he may be capable of regain management of his enterprise.

Cohen, although, insisted that Bankman-Fried had not personally transferred any belongings and that something that was moved got here on the insistence of a court docket within the Bahamas that ordered it to happen.

Sassoon, noting FTX was the second largest cryptocurrency alternate, additionally informed the choose that the federal government hoped to create a web site for victims of the fraud, slightly than notify them individually since they could quantity over a million.

Previous to Bankman-Fried’s look, his attorneys despatched a letter to the choose, saying Bankman-Fried’s dad and mom — each Stanford Legislation College professors, in latest weeks have change into the goal of “intense media scrutiny, harassment, and threats. They stated the dad and mom had acquired “a gradual stream of threatening correspondence, together with communications expressing a need that they endure bodily hurt.”

In consequence, the attorneys requested that the names be redacted on court docket paperwork for 2 people who had been lined as much as signal Bankman-Fried’s $250 million private recognizance bond. Bankman-Fried was launched with digital monitoring about two weeks in the past on the situation that he await trial at his dad and mom’ home in Palo Alto, California.

The choose allowed the names to stay secret for now, however he stated he might rethink his resolution if members of the media or others object.

Carolyn Ellison, 28, who ran Alameda, and Gary Wang, 29, who co-founded FTX, have pleaded responsible to fraud costs and are cooperating with prosecutors in a bid for leniency. Each are free on bail.

Their pleas had been stored secret till Bankman-Fried was within the air after his extradition from the Bahamas, the place FTX relies, on account of fears that he may flee.

Shortly earlier than Bankman-Fried’s arraignment, U.S. Lawyer Damian Williams introduced that he was launching a process power made up of senior prosecutors in his workplace to analyze and prosecute issues associated to the FTX collapse. He stated the duty power additionally will work to hint and get well sufferer belongings.

“The Southern District of New York is working across the clock to reply to the implosion of FTX,” Williams stated in a press launch. “It’s an all-hands-on-deck second. We’re launching the SDNY FTX Job Pressure to make sure that this pressing work continues, powered by all of SDNY’s assets and experience, till justice is completed.”


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