FTX CEO Sam Bankman-Fried pleads not guilty to fraud charges

Last Updated on 29 mins by John Piper

After an investigation into possible leverage and solvency problems surrounding Alameda Research, a FTX-affiliated trading company, FTX crashed in November 2022. The already unstable cryptocurrency market was shaken by the collapse of FTX. At the time, it had lost billions and was worth less than $1 trillion.

In November 2022 FTX faced liquidity difficulties and sought financial help. Binance, a rival exchange, briefly considered purchasing the company but quickly pulled out.

On November 11, 2022, FTX’s CEO resigned and the company declared bankruptcy.

FTX could have been the victim in the hack that stole tokens worth hundreds of millions. Sam Bankman-Fried was the founder and former CEO at FTX. He was taken into custody in the Bahamas and then extradited to the United States late in December 2022. He pleaded not guilty to all charges as of January 3, 2023.

Why did Sam Bankman Fried not plead guilty to the charges?

Bankman Fried entered a plea agreement of not guilty before a New York court. The judge ordered that the trial for the former crypto tycoon start in the fall.

According to US District Judge Lewis Kaplan’s ruling on Tuesday, the trial will begin on October 2, 2023. According to estimates, the trial could last for up to four weeks.

According to a Reuters report, Bankman-Fried reportedly spoke in private with his lawyers during his court appearance.

What sentence will Bankman-Fried receive in prison?

Danielle Sassoon (federal prosecutor) spoke during the hearing and stated that Bankman-Fried should be tried for theft of customer funds at FTX.

Sassoon suggested the government has tons of evidence against the former head a crypto exchange. ” Customer funds were […] used, and laundered through charitable gifts, political donations, and a variety venture investments.”

Bankman-Fried could spend as much as 115 years behind bars if he is found guilty at the trial. Although he acknowledged his mistakes while leading FTX he strongly denied any criminal responsibility.

What is Bankman-Fried bail?

The judge used this occasion to set the trial’s beginning date and to add further restrictions to Bankman- Fried’s unusual $250 million bond.

Despite rumors to the contrary, the FTX founder cannot access assets of FTX or Alameda Research. Prosecutors claim that they are currently investigating the assets Bankman-Fried transferred from Alameda, even though there is no evidence to the contrary.

Mark Cohen, Bankman-Fried’s attorney, stated in court on January 3rd 2023 that his client “didn’t make” the transfer. This was in response to Bankman-Fried’s December 2022 remarks in which he stated that he no longer had access to the funds. He said: “It’s possible that different legitimate branches FTX can access the monies; ideally that’s what’s occurring in this case.” Let’s just hope someone does it soon if they don’t. I’d be happy to provide this advice if regulators request it.

Bankman-Fried was allowed by the judge to redact the names of his co-signers during his latest court appearance. They were responsible for the $250 million bail.

Lawyers claim Bankman-Fried’s parents have received threats. The decision to withhold the names the other cosigners is to stop the same thing from happening.

Order in effect for the Bankman-Fried trial

Bankman Fed will be subject to electronic surveillance at the California home of his parents as per his initial bail.

Charming residence located on the outskirts Stanford University’s campus in Palo Alto. The equity of the property was used as collateral for the bail.

Sam Bankman-Fried, the exchange’s founder, was taken into custody in The Bahamas on December 13, 2022. He was initially held at Fox Hill, the country’s most notorious detention facility. After being released, he was extradited to the USA and given bail.

What does FTX collapse mean for crypto?

FTX is not the first cryptocurrency exchange to crash or the industry’s first scandal. OneCoin was an example of a scam that deceived thousands of investors before it was proved that there wasn’t a cryptocurrency.

Rising interest rates and other cost of living pressures have caused trust to be damaged in a volatile market already in danger. The same lessons must be learned from financial scandals when it comes to cryptocurrency. According to crypto gurus, reporting, governance and conflict of interest regulations are the best ways to eliminate fraud in cryptocurrency. However, crypto will continue to exist because so many people want a global currency.

Prosecutors have called it an enormous scam. Bankman-Fried was accused of illegally taking money from FTX customers in order to purchase real estate, fund his Alameda Research hedge funds, and give millions to political campaigns. The case could be delayed for years due to a long list of legal problems, including avoidance litigation and fraudulent transfer litigation. We only hope justice is done and cryptocurrency is regulated.

Coin Insider’s first article, “FTX CEO Sam Bankman Fried pleads guilty to fraud charges” appeared first on Coin Insider.

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