Sam Bankman-Fried pleads not guilty to federal fraud charges in New York

Sam Bankman-Fried pleaded not guilty in New York federal court Tuesday to eight counts related to the collapse of his former cryptocurrency exchange. FTX and the hedge fund Alameda Research.

The former crypto billionaire was accused on charges of conspiracy to commit wire fraud and securities fraud, individual charges of securities fraud and wire fraud, money laundering, and conspiracy to circumvent campaign finance regulations.

Bankman-Fried arrived outside the courthouse in a black SUV and was surrounded by cameras from the moment his car arrived. The scrum became so dense that Bankman-Fried’s mother was unable to get out of the car and fell onto the wet pavement as cameras scrambled to catch her son.

The former billionaire was dragged by security through the crowd and into the courthouse in a matter of moments, with photographers moving out of his way as Bankman-Fried was led by the lapels through the crowd.

bankman-fried returned to the United States on December 21 and was released on a $250 million recognition bond, secured by his family home, on December 22.

Earlier in the day, Bankman-Fried’s lawyers filed a motion to seal the names of two people who had guaranteed Bankman-Fried’s good behavior with a bond. Judge Lewis Kaplan approved the motion in court today.

The motion argued that the visibility of the case and the defendant had already posed a risk to Bankman-Fried’s parents, and that guarantors should not be subjected to the same scrutiny.

Federal prosecutors also announced the launch of a new task force to recover victims’ assets as part of an ongoing investigation into Bankman-Fried and the FTX collapse.

“The Southern District of New York is working around the clock to respond to the FTX implosion,” US Attorney Damian Williams said in a statement Tuesday.

The US Attorney’s Office for the Southern District of New York had argued that Bankman-Fried bribed $8 billion in client assets in extravagant real estate purchases Y vanity projectsincluding stadium naming rights and millions in political donations.

Federal prosecutors filed the indictment against Bankman-Fried with unusual speed, bringing together the criminal charges against the 30-year-old in a matter of weeks. The federal charges came along with complaints from the Commodity Futures Trading Commission Y the Securities and Exchange Commission.

They were all assembled with the cooperation of two of Bankman-Fried’s closest allies, Caroline Ellison, former CEO of his Alameda Research hedge fund, and Gary Wang, who co-founded FTX with Bankman-Fried.

Ellison, 28, and Wang, 29, pleaded guilty on December 21. His plea bargains with prosecutors came after rampant speculation that Bankman-Fried’s former romantic partner Ellison was cooperating with federal investigations.

But it was another former FTX executive, Ryan Salame, who apparently first alerted regulators to alleged wrongdoing within FTX. Salame, former co-CEO of FTX, flagged “potential mishandling of client assets” to Bahamian regulators two days before the crypto exchange filed for bankruptcy, according to a United States Securities and Exchange Commission filing. Bahamas.

Bankman-Fried was accused by federal police and financial regulators of carrying out what the SEC called one of the biggest and “blatant” frauds in recent memory. His stunning fall from grace was precipitated by reporting which raised questions about the nature of his hedge fund balance sheet.

In the weeks after FTX’s bankruptcy filing in Delaware on November 11, the normally serious bankruptcy process was marked by alarming incidents of corporate malfeasance, including a disturbing lack of record-keeping that replacement CEO John J. Ray called “total failure of corporate control.”

Bankman-Fried was indicted in New York federal court on December 9 and was arrested by Bahamas police at the request of US prosecutors on December 12. The weeks that followed his accusation were marred by Hesitation from Bankman-Fried’s Bahamian legal team about whether or not his client would consent to extradition.