Sam Bankman-Fried, founder of bankrupt cryptocurrency exchange FTX, pleads not guilty to criminal charges in a dangerous legal battle that pits him against two of his closest former business partners has been set.
The 30-year-old entrepreneur, who is receiving a $250 million bail package, was arraigned in federal court in Manhattan on Tuesday. His attorney, Mark Cohen, has pleaded not guilty to all counts.
A judge set a trial date for October 2.
Bankman-Fried, once hailed as the public face of the cryptocurrency industry, was accused last month of two wire frauds and six frauds for his role in what one federal prosecutor called a “fraud on a grand scale.” He was indicted on conspiracy-related charges.
Authorities have accused Bankman-Fried of stealing customer funds from FTX to cover loans made by FTX’s affiliated cryptocurrency hedge fund, Alameda Research. They also say he used those funds to invest in other companies and donate to the campaigns of politicians of both parties to influence public policy.
In a public statement after FTX filed for bankruptcy in November, Bankman-Fried claimed it had not committed fraud and was unaware that customer funds were being used improperly.
Two senior executives in Bankman-Fried’s cryptocurrency business — Gary Wang, co-founder of FTX, and Caroline Ellison, former CEO of Alameda. — Pledging guilty to multiple criminal charges and cooperating with federal prosecutors.
Ellison apologized when he filed the petition last month, telling the court that he “agreed with Bankman-Fried and others not to publicly disclose the nature of Alameda’s relationship with FTX, including Alameda’s credit arrangements.” I did,” he said.
As part of his release, Bankman-Fried is under house arrest at his parents’ home in Palo Alto, California. He wears surveillance equipment and has surrendered his passport.
he could face up to 115 years If convicted on all charges, you will go to jail.
Last month, a U.S. judge released him on a $250 million bail for his first appearance on U.S. soil since his arrest in the Bahamas. where he lived and ran his business.
Bankman-Fried’s parents, law professors at Stanford University who co-signed on his bond, were “subjected to intense media scrutiny, harassment and intimidation,” the defense attorney said in a letter to the court. Asked to edit the name. Two other co-signatories, known as “guarantors”.
“The two additional guarantors would face similar invasions of privacy and intimidation and harassment if their names appeared unredacted on the bond or their identities were otherwise disclosed. We have serious concerns,” the letter said.
Prosecutors allege Bankman-Fried orchestrated “one of the biggest financial frauds in American history” to steal billions from FTX customers and offset losses at sister hedge fund Alameda Research .
FTX and Alameda filed for bankruptcy in December after investors rushed to withdraw their deposits from the exchanges, sparking a liquidity crisis. And cause contagion throughout the crypto industry.
FTX’s new CEO, John Ray III, who made a name for himself overseeing the liquidation of Enron in the early 2000s, told congressional hearings that customer money deposited on the FTX site was commingled with Alameda money. , said many speculative and high-value transactions were made. -Risk Bets.
Ray described the situation at the two companies as “old fashioned embezzlement” by a small group of “very inexperienced and unsophisticated individuals.”
Separately, on Tuesday, U.S. regulators issued a statement warning market participants of certain risks posed by the cryptocurrency market due to the prevalence of fraud, volatility, misrepresentation and risk mismanagement. Did.
“It is important that risks associated with the cryptocurrency sector that cannot be mitigated or controlled do not migrate into the banking system,” read a statement issued jointly by the Federal Reserve, Federal Deposit Insurance Corporation and the Secretariat. Currency auditor.
— CNN’s Allison Morrow and Samantha Murphy-Kelley contributed to this report.