FTX founder Sam Bankman-Fried pleads not guilty to criminal charges

4 Jan 2023

Image: © Rafael Henrique/Stock.adobe.com

The former CEO faces eight criminal charges and up to 115 years in prison, while former colleagues are planning to be major witnesses for prosecutors.

FTX founder Sam Bankman-Fried, or SBF, has pleaded not guilty to criminal charges that he cheated investors and cost people billions in financial losses.

The former CEO has been accused of illegally using FTX customer deposits to support his trading company Alameda. He faces eight criminal charges in the US, including wire fraud and money laundering conspiracy.

Bankman-Fried made his plea in a New York district court where the court’s judge Lewis Kaplan set the trial date for 2 October, Reuters reports. He now faces a lengthy legal battle. According to Reuters, federal prosecutor Danielle Sassoon says prosecutors will turn over hundreds of thousands of documents to the defence team.

Bankman-Fried could also face testimony from former colleagues. FTX co-founder Gary Wang and Alameda CEO Caroline Ellison both pled guilty to federal criminal charges last month following FTX collapse. These two individuals plan to cooperate with prosecutors and will be major witnesses in the upcoming trial, TechCrunch reports.

FTX collapsed in November, falling into bankruptcy and owing billions to its top creditors. There were also reports of missing funds, along with claims that Bankman-Fried secretly transferred $10bn of customer funds from FTX to Alameda.

Bankman-Fried was arrested in the Bahamas last month, the day before he was scheduled to testify before US Congress about the crypto exchange’s sudden collapse. He was released last month on $250m bail, which allowed him to live under house arrest with his parents.

Bankman-Fried faces up to 115 years in prison if found guilty of the eight criminal charges. The FTX founder is also facing complaints from the US Securities and Exchange Commission and the Commodity Futures Trading Commission, The Guardian reports.

FTX had more than 1m users on its mobile and desktop platforms at its peak and made more than $1bn in revenue in 2021, according to 2022 statistics.

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Leigh Mc Gowran is a journalist with Silicon Republic