The disgraced cryptocurrency govt Sam Bankman-Fried pleaded not responsible on Thursday to an array of prison fees, together with new accusations that he dedicated financial institution fraud and bribed a international official.
Sporting a brand new haircut that trimmed his distinctive mop, Mr. Bankman-Fried, 31, was again in Federal District Court docket in Manhattan to be arraigned on an up to date indictment that included 5 further counts in opposition to him.
In all, the founding father of the FTX cryptocurrency change, who was initially charged in December, is dealing with 13 prison counts. Federal prosecutors have stated Mr. Bankman-Fried orchestrated an unlimited fraud that led to the collapse of the change in November and the misappropriation of billions of {dollars} in buyer deposits.
In January, he pleaded not responsible to the eight prison fees within the unique indictment.
However federal prosecutors in Manhattan have been shifting quick to increase the case in opposition to Mr. Bankman-Fried, who’s scheduled to go to trial in October. Final month, they introduced that they’d filed a financial institution fraud depend and three different fees in opposition to him. And simply this week, they filed the international bribery cost, accusing Mr. Bankman-Fried of orchestrating a $40 million fee to at the very least one Chinese language official in 2021 to unfreeze $1 billion in funds belonging to Alameda Analysis, his buying and selling agency.
In court docket on Thursday, Mr. Bankman-Fried’s lawyer, Mark Cohen, stated his shopper was difficult the fees. “My shopper pleads not responsible,” Mr. Cohen stated.
What to Know About the Collapse of FTX
What’s FTX? The now bankrupt firm was one of many world’s largest cryptocurrency exchanges. It enabled clients to commerce digital currencies for different digital currencies or conventional cash; it additionally had a local cryptocurrency often called FTT. The corporate, primarily based within the Bahamas, constructed its enterprise on dangerous buying and selling choices that aren’t authorized in the USA.
He additionally indicated that Mr. Bankman-Fried’s authorized crew would possibly contest the federal government’s proper to carry among the further fees. Mr. Bankman-Fried was extradited to the USA from the Bahamas, the place FTX was primarily based. In extradition circumstances, prosecutors are generally restricted in bringing further fees after a defendant is transferred to the USA for an preliminary indictment.
In the meantime, the federal government has produced six million pages of paperwork to Mr. Bankman-Fried’s protection crew, one of many prosecutors, Nicolas Roos, advised the decide on Thursday. Mr. Roos stated the Federal Bureau of Investigation was additionally seeking to extract info from seven laptops and telephones that belonged to Mr. Bankman-Fried and others concerned within the case.
After he was extradited to the USA in December, Mr. Bankman-Fried was launched on bail however confined to his mother and father’ dwelling in Palo Alto, Calif., the place he grew up. Whereas beneath home arrest, he has hosted a procession of tourists and repeatedly examined the bounds of the bail association. The decide chided him for logging onto a digital non-public community to look at soccer and utilizing the encrypted messaging app Sign to contact a possible witness in his case.
On Tuesday, Decide Lewis A. Kaplan approved a brand new set of bail situations for Mr. Bankman-Fried, considerably curbing his web entry. Beneath the brand new guidelines, which take impact subsequent week, he’s permitted to make use of solely two digital units — a laptop computer configured with restricted web entry and a telephone with no web connection.
Guests are prohibited from taking digital units into Mr. Bankman-Fried’s dwelling. And he shall be required to pay for a safety guard, who should display all guests utilizing a steel detector.
The Aftermath of FTX’s Downfall
- Jane Avenue Capital: The collapse of FTX has drawn consideration to the little-known Wall Avenue agency the place Sam Bankman-Fried began his profession. He was drawn there due to his curiosity in “efficient altruism.”
- Gaming Markets?: Since FTX imploded, Bankman-Fried denied accusations that he manipulated markets for his firms’ profit. Cryptocurrency traders disagree.
- Bail Phrases: A federal decide overseeing Bankman-Fried’s case has signaled a willingness to jail the disgraced govt for his persistent testing of his confinement’s boundaries.
However the bail situations are the least of Mr. Bankman-Fried’s issues. The 13 counts embrace fees of securities fraud, wire fraud and marketing campaign finance violations. He’s additionally accused of committing financial institution fraud by obscuring the hyperlinks between FTX and Alameda.
Within the up to date charging doc filed on Tuesday, federal prosecutors stated that in 2021, Mr. Bankman-Fried instructed Alameda staff to pay a $40 million bribe to a number of unnamed Chinese language officers to revive entry to buying and selling accounts maintained by Alameda that held about $1 billion in cryptocurrency. Certainly one of Alameda’s frozen accounts was on the crypto change Huobi, in keeping with two individuals aware of the matter; the change didn’t reply to a request for remark. Alameda relied on at the very least one Chinese language speaker on employees to assist unfreeze the funds, one of many individuals stated.
The bribe was paid in cryptocurrency and succeeded in getting the buying and selling accounts unfrozen, prosecutors stated.
Prosecutors introduced the bribery cost beneath the Overseas Corrupt Practices Act, a federal regulation that prohibits huge companies from paying bribes to function in different international locations.