Sam Bankman-Fried is expected on Tuesday to enter a plea of not guilty to criminal charges that he cheated investors and looted billions of dollars at his now-bankrupt FTX cryptocurrency exchange, according to a source familiar with the matter.
Bankman-Fried is accused of illegally using FTX customer
deposits to support his Alameda Research hedge fund, buy real estate and make
millions of dollars in political contributions.
He is scheduled to appear at 2pm EST on Tuesday (12:30am IST
on Wednesday) before US District Judge Lewis Kaplan in Manhattan to enter a
plea.
A lawyer for Bankman-Fried did not immediately reply to a
request for comment.
It is not unusual for criminal defendants to initially plead
not guilty. Defendants are free to change their plea at a later date.
Bankman-Fried has been free on $250 million bond following
his extradition last month from the Bahamas, where he lived and where the
exchange was based.
Since his release, Bankman-Fried has been subject to electronic
monitoring and required to live with his parents, both professors at Stanford
Law School in California.
The Massachusetts Institute of Technology graduate has been
charged with two counts of wire fraud and six conspiracy counts, including to
launder money and commit campaign finance violations. He could face up to 115
years in prison if convicted.
Bankman-Fried has admitted to making mistakes running FTX
but said he did not believe he was criminally liable.
The 30-year-old crypto mogul rode a boom in the value of
bitcoin and other digital assets to become a billionaire several times over and
an 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 strengthened by last month's guilty
pleas of two of Bankman-Fried's closest associates.
Caroline Ellison, who was Alameda's chief executive, and
Gary Wang, FTX's former chief technology officer, pleaded guilty to seven and four
criminal charges, respectively, and agreed to cooperate with prosecutors.
Ellison told prosecutors she agreed with Bankman-Fried to
hide from FTX's investors, lenders and customers that the hedge fund could
borrow unlimited sums from the exchange, according a transcript of her December
19 plea hearing. © Reuters
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