Sam Bankman-Fried Pleads Not Guilty

Topline

Sam Bankman-Fried pleaded not guilty Tuesday to charges related to the collapse of his crypto empire, according to reporters present at his arraignment hearing in a New York federal court Tuesday, setting the stage for one of the most high-profile white-collar criminal trials in American history.

Sam Bankman-Fried arrives at a Manhattan courtroom Tuesday.

AFP via Getty Images

Key Facts

The disgraced founder of crypto exchange FTX and hedge fund Alameda Research arrived at the courthouse wearing a blue suit and a North Face backpack, accompanied by bodyguards with a swarm of press.

A federal judge granted a request submitted earlier Tuesday by Bankman-Fried’s lawyers to keep private the identities of people who cosigned a multimillion-dollar bond for his release, with Bankman-Fried’s legal team citing risks to the safety of the two guarantors given the threats of “physical harm” against his parents.

Prosecutors charged Bankman-Fried with eight criminal counts last month, including commiting wire fraud on customers and lenders and conspiracy to commit money laundering and to break federal campaign finance laws.

Bankman-Fried’s plea follows guilty pleas from his top sidekicks Caroline Ellison, Alameda’s former CEO, and Gary Wang, FTX’s cofounder, on related charges for the alleged scheme to defraud FTX investors and misappropriate customer funds.

Wang vowed to work as as a “cooperating witness” while Ellison claimed, during her plea, that she and Bankman-Fried orchestrated a scheme to steal billions and that she “knew that it was wrong.”

Big Number

115 years. That’s the maximum prison sentence Bankman-Fried faces if found guilty on all counts.

Key Background

Bankman-Fried, a California native who resided in the Bahamas and headquartered FTX there, was arrested by Bahamian authorities last month and subsequently extradited to the U.S. The 30-year-old Bankman-Fried was released on a $250 million bail December 23, returning to his parents’ Palo Alto home.

Crucial Quote

The U.S. government “wants to make an example” out of Bankman-Fried, University of Richmond School of Law professor Carl Tobias told Forbes. “I think the question going forward is going to be: Is he really going to trial, or is he going to cut some kind of plea deal?”

Tangent

Bankman-Fried’s case has drawn comparisons to those of other notable white-collar fraudsters, including Bernie Madoff, who received a 150-year prison sentence for defrauding clients of about $60 billion in an infamous Ponzi scheme, and Elizabeth Holmes, who is serving an 11-year prison sentence for fraud charges related to her dubious blood-testing company Theranos.