April 15, 2024

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FTX founder Sam Bankman-Fred arrives in court to face charges

FTX founder Sam Bankman-Fred arrives in court to face charges

New York

Sam Bankman Fried, founder of bankrupt cryptocurrency exchange FTX, has arrived in Manhattan federal court where he is set to face charges including defrauding investors of billions of dollars.

Authorities have accused Bankman-Fried of stealing client funds from FTX to cover loans taken out by Alameda Research, FTX’s crypto hedge fund. They also say he used the money to invest in other companies and donate to the campaigns of politicians of both parties to influence public policy.

In public statements following the November collapse of FTX, Bankman-Fried said He insisted that he had not committed fraud He was not aware that clients’ funds were being used improperly.

He is expected to plead not guilty Tuesday.

Two of the top executives are from Bankman-Fried’s crypto business – Gary Wang, co-founder of FTX, and Caroline Ellison, who served as CEO of Alameda – You have Admission of guilt on multiple criminal charges and are cooperating with federal prosecutors.

Ellison apologized while filing her petition last month, telling the court that she had “agreed with Mr. Bankman Fried and others not to publicly disclose the true nature of the relationship between Alameda and FTX, including the Alameda fiduciary arrangement.”

As part of his release, Bankman Fried is under house arrest at his parents’ home in Pallot Alto, California. He was wearing a monitoring device and had handed over his passport.

It can face up to 115 years In prison if convicted of all charges.

Last month, a US judge release him on $250 million in bonds, making its first appearance on US soil since then Arrest in the Bahamas, Where he lived and ran his business.

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While requesting that the names of two other co-signers, known as the “guarantees,” be revised, defense attorneys wrote in a letter to the court.

“There is serious cause for concern that the two additional sponsors would face similar intrusions into their privacy as well as threats and harassment if their names appear unrecorded on their bonds or their identities are otherwise publicly disclosed,” the letter said.

Prosecutors allege that Bankman-Fried orchestrated “one of the largest financial frauds in American history,” stealing billions of dollars from FTX clients to cover losses at its sister hedge fund, Alameda Research.

FTX and Alameda both filed for bankruptcy in December after investors scrambled to withdraw deposits from the exchange, sparking a liquidity crisis. And the cause infection across the crypto industry.

New FTX CEO John Ray III, who made his name overseeing the divestment of Enron in the early 2000s, told a congressional hearing that customer funds deposited on the FTX site were mixed with money in Alameda, making a number of speculation high. . Risk bets.

Ray described the situation at both companies as “old-fashioned embezzlement” by a small group of “inexperienced and not very experienced individuals.”

CNN’s Allison Morrow and Samantha Murphy-Kelly contributed to this report.