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Sam Bankman-Fried saunters out of court with his hands in pockets after pleading not guilty to $1.8bn crypto fraud and winning right to keep secret the identity of $250m bond backers

  • FTX founder Sam Bankman-Fried pleaded not guilty to counts on Tuesday
  • He faces eight counts of fraud in alleged scheme to defraud investors for $1.8bn
  • Publicly, he has denied any intentional fraud and blamed sloppy accounting 
  • Judge Kaplan set October 2 as the tentative date for starting trial in the case 

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FTX founder Sam Bankman-Fried has pleaded not guilty to criminal charges that he defrauded investors in his crypto exchange out of $1.8billion.

Bankman-Fried’s arraignment was held in Manhattan federal court before US District Judge Lewis Kaplan at 2pm on Tuesday, where he pleaded not guilty to all eight counts of fraud and conspiracy. 

Kaplan set October 2 as the tentative trial start date, and granted a defense motion to withhold the names of two co-signers on Bankman-Fried’s $250million bond from the public. 

Prosecutors say Bankman-Fried scammed investors and illegally siphoned FTX customer deposits to prop up his Alameda Research hedge fund, buy lavish real estate in the Bahamas and splash out millions in political donations. 

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Sam Bankman-Fried leaves Manhattan Federal Court after pleading not guilty to all counts

Sam Bankman-Fried leaves Manhattan Federal Court after pleading not guilty to all counts

Sam Bankman-Fried, founder and former CEO of crypto currency exchange FTX, attends his plea hearing in Manhattan federal court, as seen in a courtroom sketch

Sam Bankman-Fried, founder and former CEO of crypto currency exchange FTX, attends his plea hearing in Manhattan federal court, as seen in a courtroom sketch

Bankman-Fried, whose crypto exchange FTX collapsed in bankruptcy in November, has publicly denied knowingly committing fraud, instead blaming sloppy accounting and poor oversight. 

With his trademark wild hair flopping in the breeze as he arrived at court Tuesday, the disgraced crypto wunderkind, 30, was dressed simply in a navy suit, white shirt, and blue polka-dot tie.

Bankman-Fried also toted a backpack as he entered court flanked by his attorney, Mark S Cohen and private investigator Jimmy Harkins, who worked for Ghislaine Maxwell and mobster John Gotti Jr.

Shortly before the arraignment, US Attorney Damian Williams announced a new task force made up of senior federal prosecutors to investigate and prosecute matters related to the FTX collapse. 

He said the task force will also work to trace and recover victim assets, believed to total in the billions.

Sam Bankman Fried arrives at his lawyer's office in New York City after his federal Court hearing this morning

Sam Bankman Fried arrives at his lawyer’s office in New York City after his federal Court hearing this morning

FTX founder Sam Bankman-Fried smiles as he leaves court,after pleading not guilty to criminal charges that he defrauded investors in his crypto exchange out of $1.8billion

FTX founder Sam Bankman-Fried smiles as he leaves court,after pleading not guilty to criminal charges that he defrauded investors in his crypto exchange out of $1.8billion

FTX founder Sam Bankman-Fried photographed earlier, arriving at court

FTX founder Sam Bankman-Fried photographed earlier, arriving at court

‘The Southern District of New York is working around the clock to respond to the implosion of FTX,’ Williams said in a statement. 

‘It is an all-hands-on-deck moment. We are launching the SDNY FTX Task Force to ensure that this urgent work continues, powered by all of SDNY’s resources and expertise, until justice is done,’ he added.

Earlier in the day, Bankman-Fried’s attorneys said his parents have ‘received a steady stream of threatening correspondence’ and asked the court to redact the names of two additional co-signers on his $250million bond. 

Following his arrest and extradition last month, Bankman-Fried, 30, has been free on bond and living under electronic monitoring at the Palo Alto, California, home of his parents, both Stanford University law professors. 

In their latest court filing on Tuesday morning, Bankman-Fried’s attorneys asked Judge Kaplan to seal the names of two co-signers on his $250million personal recognizance bond.

The bail conditions imposed by the court required the accused scammer’s parents, Joseph Bankman and Barbara Fried, to co-sign his bond, but also required two additional sureties sign separate bonds in lesser amounts.

Sam Bankman-Fried (center) arrives at Manhattan Federal Court in Manhattan with his attorney Mark S. Cohen (right) and private investigator Jimmy Harkins

Sam Bankman-Fried (center) arrives at Manhattan Federal Court in Manhattan with his attorney Mark S. Cohen (right) and private investigator Jimmy Harkins

Bankman-Fried is seen with his lawyer Mark S. Cohen (right) and private investigator Jimmy Harkins (left) as he arrives at federal court in Manhattan on Tuesday

Bankman-Fried is seen with his lawyer Mark S. Cohen (right) and private investigator Jimmy Harkins (left) as he arrives at federal court in Manhattan on Tuesday

Barbara Fried, SBF's mother, arrives at court ahead of his arraignment

Barbara Fried, SBF’s mother, arrives at court ahead of his arraignment

Prosecutors allege that Bankman-Fried scammed investors and illegally used FTX customer deposits to prop up his hedge fund

Prosecutors allege that Bankman-Fried scammed investors and illegally used FTX customer deposits to prop up his hedge fund

Bankman-Fried’s attorney Mark S. Cohen said in the filing that the parents had become the target of threats and harassment, and requested that the additional co-signers be allowed to remain anonymous. 

‘Among other things, Mr. Bankman-Fried’s parents have received a steady stream of threatening correspondence, including communications expressing a desire that they suffer physical harm,’ Cohen wrote.

The attorney added that there ‘is serious cause for concern that the two additional sureties would face similar intrusions on their privacy as well as threats and harassment’ if their identities are revealed. 

Former FTX chief executive Sam Bankman-Fried arrives to enter a plea before US District Judge Lewis Kaplan in the Manhattan federal court on Tuesday, flanked by PI Jimmy Harkins

Former FTX chief executive Sam Bankman-Fried arrives to enter a plea before US District Judge Lewis Kaplan in the Manhattan federal court on Tuesday, flanked by PI Jimmy Harkins

Former FTX chief executive Sam Bankman-Fried is seen with his mother, Barbara Fried (right) as he arrives to enter a plea before US District Judge Lewis Kaplan

Former FTX chief executive Sam Bankman-Fried is seen with his mother, Barbara Fried (right) as he arrives to enter a plea before US District Judge Lewis Kaplan

Cryptocurrency entrepreneur Sam Bankman-Fried, second from right, arrives for an appearance at Manhattan federal court Tuesday

Cryptocurrency entrepreneur Sam Bankman-Fried, second from right, arrives for an appearance at Manhattan federal court Tuesday

US Attorney Damian Williams announced a new task force made up of senior prosecutors in his office to investigate and prosecute matters related to the FTX collapse

US Attorney Damian Williams announced a new task force made up of senior prosecutors in his office to investigate and prosecute matters related to the FTX collapse 

The motion requested that Kaplan ‘issue an order directing that the names and identifying information of the two remaining sureties be redacted on their bonds and not be publicly disclosed by the Government.’ 

Prosecutors did not object to the defense motion, which the judge granted at the arraignment hearing. 

Bankman-Fried is charged with two counts of wire fraud and six conspiracy counts, including to launder money and commit campaign finance violations. 

He could face up to 115 years in prison if convicted. 

Last month, two of Bankman-Fried’s top lieutenants pleaded guilty to fraud charges and agreed to cooperate with federal prosecutors, in a potentially significant blow to his defense. 

Carolyn Ellison, 28, who ran Alameda, and Gary Wang, 29, who co-founded FTX, pleaded guilty to charges including wire fraud, securities fraud and commodities fraud. 

Both are free on bail and cooperating with prosecutors in a bid for leniency ahead of sentencing. 

Following the arraignment, Bankman-Fried quickly removed his tie as he left court

Following the arraignment, Bankman-Fried quickly removed his tie as he left court

Bankman-Fried, 30, has been free on bond and living under electronic monitoring at the Palo Alto, California, home of his parents, both Stanford University law professors

Bankman-Fried, 30, has been free on bond and living under electronic monitoring at the Palo Alto, California, home of his parents, both Stanford University law professors 

Carolyn Ellison

Gary Wang

Carolyn Ellison, 28, who ran Alameda, and Gary Wang, 29, who co-founded FTX, previously pleaded guilty and agreed to cooperate with prosecutors in a bid for leniency 

Their pleas were kept secret until Bankman-Fried was in the air after his extradition from the Bahamas, where FTX is based, due to fears that he might flee.

Ellison and Wang both face decades in prison at their sentencings.

FTX, once valued as high as $32billion, filed for bankruptcy protection on November 11 after alleged misappropriation of client funds left a multi-billion hole in the crypto exchange’s books.

The collapse of FTX, which had been the second-largest crypto exchange in the world, left creditors seeking to recoup billions in claimed losses. 

Prior to his December 12 arrest in the Bahamas, SBF acknowledged risk-management failures at FTX, but maintained he does not believe he is criminally liable. 

Bankman-Fried, Ellison and Wang were also sued by the U.S. Securities and Exchange Commission and the Commodity Futures Trading Commission. Ellison and Wang settled those civil cases.

FTX’s new chief executive, John J. Ray III, known for his work liquidating energy company Enron Corp in bankruptcy, has said FTX was run by ‘grossly inexperienced’ and unsophisticated people.

Source: Daily Mail UK

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