Sam Bankman-Fried: Founder of Busted Crypto Exchange FTX Pleads Not Guilty

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Before the hearing: Sam Bankman-Fried

Photo: David Dee Delgado / REUTERS

FTX founder Sam Bankman-Fried, accused of fraud, money laundering and other crimes, has predictably pleaded not guilty.

According to reports from US media, the responsible judge Lewis Kaplan set the trial to begin on October 2, 2023 at a hearing in New York.

The public prosecutor's office accuses Bankman-Fried, among other things, of misleading investors in his crypto empire, which collapsed about two months ago, and of embezzling customer funds on a large scale.

Federal Attorney Danielle Sassoon indicated that the government has extensive evidence against Bankman-Fried, according to Reuters.

Confessions have already been received from two former high-ranking Bankman-Fried employees who could testify at the trial.

The 30-year-old himself admitted to making mistakes, but denied any intention to defraud.

He faces up to 115 years in prison if convicted on all eight counts.

FTX filed for bankruptcy protection on Nov. 11 after customers withdrew funds en masse in response to the covert move of $10 billion in deposits.

Bankman-Fried, known in the crypto industry as SBF, resigned.

Shortly before, authorities in the Bahamas had already frozen company funds.

Bankman-Fried was arrested in the Bahamas in December at the behest of US law enforcement officials.

FTX, which was one of the largest exchanges for cryptocurrencies like Bitcoin before the collapse, was headquartered there.

After his extradition to the United States, Bankman-Fried was released on bail.

There are also civil lawsuits and class action lawsuits against the FTX founder in the United States.

A few months ago, the young entrepreneur was still considered a crypto prodigy.

Before the FTX bankruptcy, Forbes and Bloomberg once put his fortune at more than $26 billion.

After the collapse, he said he only had around $100,000 left in the account.

US supervisors warn banks to be cautious

Meanwhile, US financial institutions have warned banks to be more cautious when dealing with cryptocurrencies.

The main risks for financial institutions included legal uncertainties and false or misleading disclosures from companies in the digital money industry, said the US Federal Reserve, the FDIC deposit insurance fund and the OCC banking regulator.

Supervisors have security concerns about banks with business models that are heavily focused on the crypto sector.

It is important that risks in this area that cannot be controlled do not spill over into the banking system.

dam/dpa/Reuters