Sam Bankman-Fried on Tuesday pleaded not guilty to all 8 counts related to the collapse of his crypto Ponzi scheme.
Former FTX CEO Sam Bankman-Fried pleaded not guilty to federal charges in New York today, less than two months after his crypto empire collapsed. https://t.co/16cMDWuWQi pic.twitter.com/ZGeX0qfCBA
— CNBC (@CNBC) January 3, 2023
Bankman-Fried was swarmed by media and watchers as he arrived to court in Manhattan.
FTX co-founder Sam Bankman-Fried pleads not guilty to US criminal fraud charges over spectacular collapse of his crypto exchange pic.twitter.com/I4nTROcGLf
— TRT World Now (@TRTWorldNow) January 3, 2023
Sam Bankman-Fried pleaded not guilty in New York federal court Tuesday to eight charges related to the collapse of his former crypto exchange FTX and hedge fund Alameda Research.
The onetime crypto billionaire was indicted on charges of conspiracy to commit wire fraud and securities fraud, individual charges of securities fraud and wire fraud, money laundering and conspiracy to avoid campaign finance regulations.
Bankman-Fried arrived outside the courthouse in a black SUV and was swarmed with cameras from the moment his car arrived. The scrum grew so thick that Bankman-Fried’s mother was unable to exit the vehicle, falling onto the wet pavement as cameras scrambled to catch a glimpse of her son.
Bankman-Fried was hauled by security through the throng and into the courthouse in a matter of moments, with photographers scrambling to get out of the way.
Sam Bankman-Fried’s ex-girlfriend Caroline Ellison, Alameda CEO, pleaded guilty to charges of fraud and conspiracy a couple weeks ago.
According to US Attorney Damian Williams, Caroline Ellison is cooperating with prosecutors in the Southern District of New York.
The SDNY also charged FTX co-founder Gary Wang with fraud.
In a separate complaint, the SEC charged Ellison and Wang with securities fraud.
Caroline Ellison admitted she and Sam Bankman-Fried conspired to mislead FTX investors and customers.
Ellison said her former company Alameda had access to FTX’s cash which ultimately afforded her an unlimited line of credit with no oversight.
Because of this arrangement, Alameda was able to ‘borrow’ money from FTX without having to put up any collateral or be subject to margin calls.
“From 2019 through 2022, I was aware that Alameda was provided access to a borrowing facility on FTX.com, the cryptocurrency exchange run by Mr. Bankman-Fried,” Ellison said. “In practical terms, this arrangement permitted Alameda access to an unlimited line of credit without being required to post collateral, without having negative balances and without being subject to margin calls on FTX.com’s liquidation protocols.”