Last Update: January 04, 2023, 13:39 IST
Sam Bankman-Fried, the former chief executive of FTX who faced fraud charges over the collapse of the bankrupt cryptocurrency exchange, walks after a hearing in Manhattan federal court in New York City, US (Image: Reuters)
Bankman-Fried is facing trial as investors lost millions due to mismanagement of the FTX trading platform she co-founded
FTX co-founder Sam Bankman-Fried pleaded not guilty Tuesday to US criminal fraud charges over the spectacular collapse of his crypto exchange.
The 30-year-old former digital currency billionaire, who is out on bail, filed the plea in federal court in Manhattan before New York Judge Lewis Kaplan.
FTX and its affiliate trading house Alameda Research went bankrupt in November, dismantling a virtual trading business that at one point was valued by the market at $32 billion.
The United States has charged Bankman-Fried with conspiracy, wire fraud, money laundering and election finance violations.
Prosecutors allege he defrauded investors and misappropriated FTX and Alameda Research clients’ funds.
Bankman-Fried pleaded not guilty to all eight counts against her – each of which carries a maximum sentence of 20 years in prison.
Judge Kaplan set a tentative date of October 2 for the start of his trial.
Since its founding in 2019, FTX has become a leading player in the crypto-currency world.
Bankman-Fried appeared on the covers of magazines, attracted huge investments from prominent fund managers and venture capitalists, and was touted as the future Warren Buffett.
He became one of the largest public donors to the Democratic Party, and claimed to have donated a similar amount privately to the Republican camp.
But their world was sensationally shattered in November when a media report stated that Almeida’s balance sheet was based on tokens created by FTX with no independent value.
This exposed Bankman-Fried’s companies as being dangerously intertwined.
He was arrested at his apartment in the Bahamas – where FTX is headquartered – on December 12 at the request of federal prosecutors in New York.
He accused them of “competing massive fraud to extort billions of dollars of customer funds of trading platforms for their own personal gain and to help grow their crypto empire.”
He spent nine days in jail in the island nation before being extradited to the United States, where he appeared in court in December.
He was released on a $250 million bail package that required him to live at his parents’ home in California. He is also under electronic surveillance.
Prosecutors have already secured guilty pleas for two key figures in the case.
Alameda Research CEO Carolyn Ellison and FTX co-founder Gary Wang pleaded guilty to charges related to the FTX collapse last month and are cooperating with authorities.
The US Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) have filed civil suits against Ellison and Wang.
The CFTC estimates that $8 billion in funds was embezzled from FTX customer accounts.
The US Securities and Exchange Commission separately charged Bankman-Fried with violating securities laws.
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(This story has not been edited by News18 staff and is published from a syndicated news agency feed)