Sam Bankman-Fried, the disgraced businessman, wants to enter a “not guilty” plea to multiple counts of fraud and money laundering on Tuesday.
When it came to light that the 30-year-old ex-billionaire had lost incalculable billions of dollars in customer assets because he had commingled funds between his cryptocurrency exchange FTX and subsidiary trading business Alameda Research, he became a lightning rod for criticism. According to a Reuters story, he will deny guilt in front of U.S. District Judge Lewis Kaplan in Manhattan.
Former Alameda Research CEO Caroline Ellison and FTX co-founder Gary Wang have both pleaded guilty.
Let me repeat a statement I made earlier this week. “If you were involved in misbehavior at FTX or Alameda, now is the moment to get ahead of it,” said U.S. Attorney for the Southern District of New York Damien Williams in a statement announcing their decision. We are making rapid progress, and the length of our patience is limited.
Bankman-Fried has just been granted permission to live with his parents in northern California after posting a $250,000,000 bail. Current security for the bond consists of $4 million in equity owned by Joseph Bankman and Barbara Fried.
Williams has filed an indictment against the would-be cryptocurrency savior, charging him with conspiracy to conduct wire fraud, commodities fraud, securities fraud, money laundering, and fraud against the Federal Election Commission in the form of campaign finance crimes.
When rumors of suspected fraudulent behavior at his enterprises began to circulate, Bankman-Fried was living in the Bahamas and running FTX and Alameda Research with the help of his inexperienced coworkers. After a short stay in Fox Hill Prison, the only government detention center of the small island nation, he was extradited to the United States last month. A State Department report described the facility as harsh due to “overcrowding, poor nutrition, inadequate sanitation, and inadequate medical care.”
Following the downfall of the cryptocurrency company he founded, media attention focused on Bankman-Fried due to revelations about the businessman’s lavish political contributions. With roughly $39 million donated to different Democratic candidates during the most recent midterm elections, he ranks as Open Secrets’ number two donor to the campaign that put President Joe Biden in the White House more than two years ago. He said he gave “roughly the same amount” to Republicans in secret donations during a recent interview.
According to Bloomberg, in the months leading up to his arrest, Bankman-Fried was allowed audiences at the White House with key administration officials, even though he faces 115 years in prison if convicted on all counts. The former entrepreneur’s brother, Gabriel Bankman-Fried, now runs the nonprofit Guarding Against Pandemics and attends both his meeting at the White House and one in which his sibling also took part.
The trustee in the FTX bankruptcy, John Ray III, has threatened to recover any funds paid to Bankman-Fried and his colleagues from illegally obtained funds. Incoming House Minority Leader Hakeem Jeffries (D-NY), Senator Cory Booker (D-NJ), Senator Joe Manchin (D-WV), Senator Debbie Stabenow (D-MI), Senator Dick Durbin (D-IL), and Senator Patty Murray (D-WA) all received donations from Bankman-Fried (D-WA).