FTX founder Sam Bankman-Fried will likely plead not guilty to fraud and other charges in a lawsuit next week, according to people familiar with the matter.
Earlier this month, the U.S. Attorney for the Southern District of New York charged Bankman Freed with involvement in fraud and facilitating the collapse of a cryptocurrency exchange, as well as overseeing one of the largest financial scams in American history.
And it is possible that Bankman will personally come to New York on January 3 to present his defense.
Prior to his arrest, there were rumors that Bankman pleaded not guilty, while prosecuting the loss of client funds due to sloppy record keeping and bank account issues that allowed a subsidiary of the exchange, Alameda Research, to cover huge losses with client money. FTX.
Accepted Partners
Bankman and his associates are at odds with former Alameda Research CEO Caroline Ellison and former FTX CTO Gary Wang, who have pleaded guilty to crimes similar to Bankman's charges and both cooperated with federal investigators.
The collapse of FTX and its trading subsidiary Alameda rocked the nascent world of cryptocurrencies as prosecutors said that Bankman's company, Alameda Research, used billions of dollars of FTX client money to pay off debts and expenses.
Both companies filed for bankruptcy last month, and retail traders who have entrusted their cryptocurrencies to the exchange may face lengthy bankruptcy proceedings before they have a chance to get their money back.
Bankman was released on $250 million bail last week after appearing in federal court in New York following his extradition from the Bahamas and ordered to stay at his family's home in Palo Alto, California.
Conspiracy with the Unknown
According to the U.S. Attorney General's indictment, prosecutors accuse Bankman of collaborating with unidentified individuals to defraud customers and creditors by providing misleading information to creditors about Alameda's finances from 2019 through November.
Bankman has also been charged with fraud by collaborating with others to make illegal donations on behalf of other candidates and political committees before the Federal Election Commission as of 2020.
The Wall Street Journal previously reported that Bankman and his associates have donated more than $70 million to campaigns in recent years and personally donated $40 million ahead of the 2022 midterm elections.
high risk
Bankman has also been indicted by the Securities and Exchange Commission and the Commodity Futures Trading Commission.
The Securities and Exchange Commission said in a lawsuit that Bankman diverted client funds from the FTX institution to support the Alameda and make risky investments, real estate purchases and political donations.
The CFTC filed a lawsuit accusing Bankman of trading Alameda and FTX fraud on CFTC-regulated markets.
On Friday, Bankman took to Twitter for the first time since December 12 to defend himself against the rumours, saying he had transferred funds from several Alameda-related crypto wallets.
Cryptocurrency prices have fallen this year due to rising central bank interest rates and the collapse of hedge funds and established cryptocurrency lenders, Bitcoin and Ethereum prices have fallen 64% and 67% respectively, and the market capitalization of all of them, according to data from CoinMarketCap . cryptocurrencies fell to $795 billion.
Cryptocurrency Migration After FTX Crash
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