FTX founder Sam Bankman-Fried to enter plea next week
- December 29, 2022
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FTX founder Sam Bankman-Fried is expected to enter a plea in his multimillion-dollar cryptocurrency fraud case next week, court records showed Wednesday.
Free on $250 million bail and confined to his parents’ California home with an electronic monitoring bracelet, the 30-year-old is charged with two counts of wire fraud and six counts of conspiracy, including conspiring to launder money and violate campaign finance laws.
If convicted on all counts, he could face more than a century in prison.
Bankman-Fried was arrested Dec. 12 in the Bahamas, where FTX is incorporated, and extradited to the U.S. last week.
Until his $32 billion firm filed for Chapter 11 bankruptcy protection on Nov. 11, Bankman-Fried was a darling of the cryptocurrency set, on track to become the world’s first trillionaire.
Now his colleagues have ratted him out, with business partners Carolyn Ellison, 28, and Gary Wang, 29, pleading guilty in Manhattan Federal Court to fraud charges and cooperating with prosecutors in return for sentencing leniency.
Bankman-Fried replaced as FTX’s CEO by John Ray III, who testified to numerous irregularities and unsound practices before the House Financial Services Committee.
Ray, whose job is to clean up the company’s mess, said Dec. 13 that its collapse appears so far “to stem from the absolute concentration of control in the hands of a very small group of grossly inexperienced and unsophisticated individuals who failed to implement virtually any of the systems or controls that are necessary for a company that is entrusted with other people’s money or assets.”
According to prosecutors, Bankman-Fried diverted billions from customers’ trading funds to expand his crypto empire and pocket the proceeds..
The $740 million recovered since are a fraction of the $51 billion collateral collapse the company suffered.
On Monday the U.S. Department of Justice launched an investigation into the theft of $372 million in cryptocurrency right before the company declared bankruptcy. Bankman-Fried is not a suspect.
Since Tuesday the case has been under the jurisdiction of Manhattan Federal Court Judge Lewis A. Kaplan, who took over when the original judge recused herself. Bankman-Fried is due in court on Jan. 3, when he is expected to enter a plea, Reuters reported Wednesday.
With News Wire Services