FTX’s Sam Bankman-Fried Could Plead Guilty to Cheating
Sam Bankman-Fried is expected to plead not guilty to criminal charges of defrauding investors and looting billions of dollars from his now bankrupt cryptocurrency exchange FTX, according to a source familiar with the matter.
Bankman-Fried is accused of illegally using FTX client deposits to support his Alameda Research hedge fund, buy real estate and earn millions of dollars in political contributions.
He is scheduled to appear at 2:00 p.m. EST Tuesday (12:30 a.m. IST Wednesday) before U.S. District Judge Lewis Kaplan in Manhattan to enter a plea.
A lawyer for Bankman-Fried did not immediately respond to a request for comment.
It is not uncommon for defendants to initially plead not guilty. Defendants are free to modify their plea later.
Bankman-Fried was freed from a $250 million (about 2,000 crore rupees) bond after his extradition last month from the Bahamas, where he lived and where the exchange was based.
Since his release, Bankman-Fried has been electronically monitored and required to live with his parents, both professors at Stanford Law School in California.
The Massachusetts Institute of Technology graduate was charged with two counts of wire fraud and six counts of conspiracy, including to launder money and commit campaign finance violations. He faces up to 115 years in prison if convicted.
Bankman-Fried admitted to making mistakes while running FTX, but said he did not believe he was criminally responsible.
The 30-year-old crypto mogul boomed in the value of bitcoin and other digital assets to become a multi-billionaire and influential political donor in the United States, until FTX collapsed in early November after a wave of withdrawals. The exchange declared bankruptcy on November 11.
The prosecution case was bolstered by the guilty pleas last month of two of Bankman-Fried’s closest associates.
Caroline Ellison, who was the chief executive of Alameda, and Gary Wang, the former chief technology officer of FTX, pleaded guilty to seven and four counts, respectively, and agreed to cooperate with prosecutors.
Ellison told prosecutors she agreed with Bankman-Fried to hide from FTX investors, lenders and clients that the hedge fund could borrow unlimited amounts from the exchange, according to a transcript of her December 19 plea hearing. .
© Thomson Reuters 2022
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