Tuesday, FTX founder Sam Bankman-Fried will go to court.
Tuesday, FTX founder Sam Bankman-Fried will go to court. It has been reported that Sam Bankman-Fried, the discredited founder of the defunct cryptocurrency exchange FTX, would personally appear in a Manhattan federal court on Tuesday to face allegations that include defrauding investors out of billions of dollars.
Eight criminal counts have been filed against Bankman-Fried, also known as SBF, for offenses including wire fraud, conspiracy to commit money laundering, and collaboration by squandering customer funds. Many anticipate that he will enter a not-guilty plea. He faces a possible 115-year prison sentence if found guilty on all counts.
In his first appearance on American soil after his arrest in the Bahamas, where he lived and controlled his businesses, a US judge released him last month on a $250 million bond. Federal prosecutors and Bankman-attorneys Fried’s presented a bail arrangement in which the ex-“crypto king” would remain under house arrest at his parents’ home in Palo Alto, California, while also wearing an electronic ankle monitor, and the judge agreed.
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Bankman-parents Fried are both law professors at Stanford, and they co-signed his bond. His defense attorneys have asked the court to redact the names of two other co-signers, who are called “sureties,” because they have “been the object of intense media scrutiny, harassment, and threats.”
The letter warns that if the sureties’ names appear unredacted on the bonds or if their identities are publicly publicized, they “would face comparable intrusions on their privacy as well as threats and harassment.”
“Plain old-fashioned theft.”
Prosecutors accuse Bankman-Fried of masterminding “one of the largest financial frauds in American history,” in which billions of dollars were stolen from FTX customers to offset losses at its sibling hedge fund, Alameda Research.
A liquidity problem and widespread fear in the cryptocurrency market contributed to the bankruptcy filings of FTX and Alameda in December.
According to unsealed court filings, Gary Wang, co-founder of FTX, and Caroline Ellison, CEO of Alameda, both of whom were involved in the collapse, have pleaded guilty to several criminal offenses and are collaborating with federal prosecutors.
The Securities and Exchange Commission has also filed civil fraud accusations against them.
According to the federal sentencing standards used in court, Wang could be sentenced to up to 50 years in prison. Since Ellison has pleaded guilty to seven charges, she could be sentenced to up to 110 years in jail.
Customer assets put on the FTX site were commingled with monies at Alameda, which made a series of speculative, high-risk wagers, according to FTX’s new CEO John Ray III, who earned his name handling the liquidation of Enron in the early 2000s, in testimony before Congress.
According to Ray, the scenario at the two businesses was “old-fashioned embezzlement” perpetrated by a handful of “grossly untrained and naive persons.”
