Sam Bankman-Fried pleads not guilty to FTX cryptocurrency exchange fraud

"Not guilty".

This is how Sam Bankman-Fried, founder of the FTX cryptocurrency market, declared himself this Tuesday when he appeared before the New York court investigating the case.

The entrepreneur, known by its acronym SBF, is accused by the Prosecutor of eight crimes for the hole of 8,000 million dollars (7,570 million euros) that it is estimated that he left in the firm, which went bankrupt with hundreds of thousands of clients harmed.

SBF, 30, is free on bail of 250 million dollars (235 million euros) that was granted two weeks ago, but he was summoned again this Tuesday before District Judge Lewis Kaplan.

The entrepreneur was arrested on December 12 in the Bahamas at the request of the United States and after being held in a prison in deplorable conditions, he admitted his fast-track extradition to be tried in the United States.

The judge has set a tentative date for the start of the trial on October 2.

The bond to remain confined in his family home in Palo Alto has been provided by his own parents, professors at Stanford University, and by two other guarantors who have requested anonymity.

The Department of Justice charges Bankman-Fried with eight crimes, including investor and lender fraud, money laundering conspiracy, stock market fraud and even illicit campaign financing, crimes punishable by an aggregate maximum of 115 years in prison. .

The prosecution and supervisors point out that FTX was a fraud from the beginning, diverting money from clients to Alameda, an investment fund of Sam Bankman-Fried.

The lawyers are the ones who have exposed the plea of ​​innocence of Bankman-Fried, who has not intervened in the hearing, to which he has arrived dressed in a jacket and tie, far from the informal clothing he wore when he savored success and gave lessons in philanthropy.

Along with Bankman-Fried are also accused Caroline Ellison, Bankman-Fried's former partner and former head of Alameda Research, and Zixiao Wang, co-founder of the platform who was its chief technology officer.

Both are collaborating with justice.

Accused of "mass fraud"

FTX was a hoax from the start.

Bankman-Fried “orchestrated a massive, years-long fraud, diverting billions of dollars of client funds from the trading platform for his own personal gain and to help grow his cryptocurrency empire,” according to the Commission. of Securities and Exchange (the SEC), which has filed civil charges in parallel.

The FTX founder told investors that his market had sophisticated automated measures to protect client assets, that these portfolios were safe, that his firm was transparent, and that Alameda, the seed of the group, was one more client of the platform without special privileges, but that was all a lie.

Clients' money was transferred to accounts that were actually controlled by Alameda.

There was no transparency and no proper controls.

In addition, Alameda had privileged treatment, was not subject to risk control measures and had a practically unlimited line of credit from FTX that was financed with the money of other clients and in exchange delivered the group's own crypto assets as collateral with hardly any real value.

The group raised at least 1,800 million dollars in different financing rounds in which venture capital investors were incorporated as shareholders, who came to grant the platform a valuation of up to 32,000 million dollars.

Bankman-Fried had theoretically become one of the richest men in the world, but it all came crashing down like a house of cards when the cryptocurrency market crashed and Alameda suffered massive losses, was unable to pay off his debts, and took more money from FTX itself.

In addition to financial crimes, the Prosecutor's Office accuses him of having violated federal campaign finance laws by making illegal contributions worth tens of millions of dollars to candidates and committees associated with both Democrats and Republicans.