Economic Insider

FTX founder denies fraud charges

ftx
Image Commercially Licensed From: DepositPhotos

The former CEO of the defunct bitcoin exchange FTX has formally denied defrauding clients and investors.

In a US court, Sam Bankman-Fried was accused of utilizing FTX client deposits to fund his other business, Alameda Research, buy real estate, and contribute to political campaigns. He entered a not guilty plea.

He was detained last month, but a bail package totaling $250 million (£208 million) got him out of jail.

If convicted, he could face more than 100 years in prison.

Judge Lewis Kaplan has set the trial date for October 2.

Two of Mr. Fried’s closest colleagues at Bankman have already pleaded guilty and are helping with the investigation, which has shaken the entire cryptocurrency industry.

Before he was arrested, the former billionaire, who is 30 years old, said in interviews that he had made mistakes but that they were his fault.

As the case goes on, it’s not unusual for the defense to change their pleas.

Mr. Bankman-Fried was one of the most well-known people in the cryptocurrency industry when he started FTX in 2019. He was known for his political connections, the fact that famous people liked him, and that he helped other companies in trouble.

But in November, when customers heard that the company’s finances were in bad shape, many took their money out. Because of this, FTX had to say it was bankrupt and that billions of dollars were missing.

Federal prosecutors said at a press conference that the platform crash where people could buy and sell digital tokens was caused by “intentional fraud.”

Prosecutors said that Mr. Bankman-Fried stole money from FTX customers without their permission and used it to pay off debts at his other company, Alameda, and make other investments.

They told the public about eight criminal charges, like wire fraud, laundering money, and breaking laws about campaign finance. The people in charge of the financial world also sued Mr. Bankman-Fried.

In December, Mr. Bankman-Fried was caught where he lived, in the Bahamas.

He was sent back to the US and given $250 million bail so that he could go free. He had to wear an electronic monitoring bracelet and spend most of his time at the home of his law professor parents in California.

His parents also signed the bond, so they will pay the money if Mr. Bankman-Fried doesn’t show up to court.

Tuesday, lawyers asked the court to keep the names of the other backers secret because they said that Sam Bankman’s parents, Fried, had been getting death threats. Judge Kaplan granted this request.

FTX founder released on bail

Sam Bankman-Fried, the former head of the now-defunct cryptocurrency exchange FTX, will have to stay at home while he waits to be tried in the US for scamming customers and investors.

A US judge said that the 30-year-old former billionaire could go home to his parents if they paid a $250 million (£207 million) bond.

Mr. Bankman-Fried didn’t say he was guilty or not guilty at the hearing.

He has already denied the accusations, which have shaken the whole cryptocurrency industry.

Two of Mr. Bankman-closest Fried’s coworkers admitted to committing fraud on Wednesday and are now helping the investigation.

At a press conference, they called it “one of the biggest financial frauds in US history” and announced eight criminal charges, including wire fraud, money laundering, and campaign finance violations. In addition, civil charges have also been brought by the people in charge of the financial system.

Mr. Bankman-Fried had to think about what to do for nine days while locked up in the Bahamas. On Wednesday, he told the Nassau magistrates’ court that he would not fight extradition, which could have led to a long legal battle.

At a court hearing in New York, Assistant US Attorney Nick Roos said that even though Mr. Bankman-Fried committed a “fraud of epic proportions,” prosecutors would not object to him being released on bail. He said this by saying that Mr. Bankman-Fried returned to the US alone and lost a lot of money.

Mr. Bankman-Fried has to give up his passport and agree to be tracked and held at his parent’s house in California to escape jail. He also agreed to take care of his mental health regularly. Mr. Bankman’s lawyer, Mark Cohen, said his parents would sign the $250 million bond with him.

Mr. Bankman-Fried, the son of two professors at Stanford University, started FTX in 2019.

Fans of the MIT graduate with curly hair called him “SBF.” He was known as the “King of Crypto” in the crypto world because he saved failing companies and gave money to charities.

Once worth more than $30 billion (£25 billion), his company’s fall has shaken up the industry, causing other companies to file for bankruptcy and crypto values to drop even more.

When customers and investors heard that the company was having money problems in November, they moved quickly to get their money out.

On the same day, Mr. Bankman-Fried quit as CEO. He has said that he didn’t do anything wrong on purpose and that his main goal is to get customers’ money back.

Read Also: Train strikes could last longer than usual 

At his arraignment, Mr. Bankman-Fried only spoke once. He was asked if he understood the terms of his release, and if he didn’t show up to court, he could be charged with another crime.

Ambassador

Ambassador