Fallen crypto founder Sam Bankman-Fried is scheduled to appear in court Tuesday afternoon. The former FTX CEO is planning to plead not guilty to criminal fraud charges, according to reports from multiple outlets including Reuters, The Wall Street Journal, and ABC News.
Bankman-Fried, or SBF as he’s commonly called, is accused of illegally investing FTX user funds into the hedge fund, Alameda Research, which he co-founded and which was run by his ex-girlfriend, Caroline Ellison. SBF also allegedly used FTX customer money to buy property and donate to political campaigns. Then, it all imploded spectacularly in a “liquidity crisis.”
FTX declared bankruptcy and SBF resigned. Other crypto companies with money in the failed exchange fell apart amid the contagion, and the crypto winter got even colder. Evidence of astounding financial misdeeds came to light. SBF all but admitted to journalists that he committed crimes. Authorities arrested Bankman-Fried in the Bahamas and then extradited him to the United States.
Now, his criminal trial is set to progress Tuesday afternoon at 2 p.m. EST. SBF is facing eight felony counts including fraud, conspiracy, and money laundering. He will be arraigned in Manhattan federal court, before U.S. District Judge Lewis Kaplan, where he is expected to file an initial, not guilty plea. Even under the circumstances, such a plea is fairly standard in high profile criminal cases.
Though, Alameda Research’s Ellison and FTX co-founder, Gary Wang, have already both plead guilty in their connected cases as part of likely deals to reduce their own sentences at the expense of SBF.
In the lead up to his trial, SBF was released on an enormous $US250 ($347) million bail and is living with his parents in Palo Alto, California. The bail package is among the largest in U.S. history, and was secured via the equity in Bankman-Fried’s parents’ house. Note: Assets backing a bond often only need equal about 10% of the total value.
On top of his parents’ support though, Bankman-Fried needs two additional signatories (at least one not related to him) on the bond by January 5 in order for it to remain valid. And SBF is hoping to keep the identities of those co-signers under wraps. In a Tuesday court filing, the disgraced golden boy of crypto asked Judge Lewis Kaplan to redact the names of his sureties, to protect the two unknown parties from “media scrutiny” and “harassment.” “The presumption of access here is vastly outweighed by the privacy and safety interests implicated by the documents at issue,” Bankman-Fried’s lawyers wrote in the letter.