Founder of cryptocurrency exchange FTX pleads not guilty to fraud - PBS NewsHour

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Larry Neumeister, Associated Press Larry Neumeister, Associated Press
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NEW YORK (AP) — FTX founder Sam Bankman-Fried pleaded not guilty in Manhattan federal court Tuesday to charges that he cheated investors and looted customer deposits on his cryptocurrency trading platform as a judge set a tentative trial date for October.
Bankman-Fried, 30, is accused of illegally diverting massive sums of customer money from FTX to make lavish real estate purchases, donate money to politicians and make risky trades at Alameda Research, his cryptocurrency hedge fund trading firm.
READ MORE: Judge kept plea deals by FTX executives secret to get founder Bankman-Fried to U.S.
Bankman-Fried’s attorney, Mark Cohen, announced his client’s plea, saying: “He pleads not guilty to all counts.”
Afterward, Judge Lewis A. Kaplan set a tentative trial date of Oct. 2, saying he might move it forward or backward a day or two.
Wearing a backpack, Bankman-Fried marched through a crush of cameras as he entered the courthouse on a rainy day to make his first appearance before Kaplan. After taking a plea during the arraignment, Kaplan discussed with lawyers a schedule for proceeding toward a trial.
Kaplan decided that motions by the defense and responses to them by prosecutors would be due in April with an argument over the motions taking place on May 18.
READ MORE: Judge sets $250M bond, house arrest for Sam Bankman-Fried, founder of FTX crypto exchange
Prior to his appearance, his lawyers sent a letter to the judge, saying Bankman-Fried’s parents in recent weeks have become the target of “intense media scrutiny, harassment, and threats, including communications expressing a desire that they suffer physical harm.”
As a result, the lawyers requested that the names be redacted on court documents for the two individuals lined up to sign Bankman-Fried’s $250 million personal recognizance bond. Bankman-Fried was released with electronic monitoring about two weeks ago on the condition that he await trial at his parents’ house in Palo Alto, California.
The judge invited prosecutors to respond to the letter and said he’ll rule later.
Carolyn Ellison, 28, who ran Alameda, and Gary Wang, 29, who co-founded FTX, have pleaded guilty to fraud charges and are cooperating with prosecutors in a bid for leniency. Both are free on bail.
WATCH: The effects of FTX’s collapse on the cryptocurrency industry
Their pleas were kept secret until Bankman-Fried was in the air after his extradition from the Bahamas, where FTX is based, due to fears that he might flee.
Shortly before Bankman-Fried’s arraignment, U.S. Attorney Damian Williams announced that he was launching a task force of senior prosecutors to investigate and prosecute matters related to the FTX collapse. He said the task force also will work to trace and recover victim assets.
“The Southern District of New York is working around the clock to respond to the implosion of FTX,” Williams said in a press release. “It is an all-hands-on-deck moment. We are launching the SDNY FTX Task Force to ensure that this urgent work continues, powered by all of SDNY’s resources and expertise until justice is done.”
Left: Sam Bankman-Fried, who founded and led FTX until a liquidity crunch forced the cryptocurrency exchange to declare bankruptcy, is escorted out of the Magistrate Court building after his arrest in Nassau, Bahamas December 13, 2022. REUTERS/Dante Carrer REFILE – CORRECTING INFORMATION
By Larry Neumeister, Associated Press
By Ken Sweet, Associated Press
By Ken Sweet, Associated Press
Larry Neumeister, Associated Press Larry Neumeister, Associated Press
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