Sam Bankman-Fried Pleads Not Guilty to Additional Set of Charges


Business News - Opportunities - Reviews



The disgraced cryptocurrency executive Sam Bankman-Fried on Thursday pleaded not guilty to an array of criminal charges, including new accusations that he committed bank fraud and bribed a foreign official.

Sporting a new haircut that trimmed his distinctive mop, Mr. Bankman-Fried, 31, was back in Federal District Court in Manhattan to be arraigned on an updated indictment that included five additional counts against him.

In all, the founder of the FTX cryptocurrency exchange, who was originally charged in December, is facing 13 criminal counts. Federal prosecutors have said Mr. Bankman-Fried orchestrated a vast fraud that led to the collapse of the exchange in November and the misappropriation of billions of dollars in customer deposits.

In January, Mr. Bankman-Fried pleaded not guilty to the eight criminal charges in the original indictment.

But federal prosecutors in Manhattan have been moving fast to expand the case against Mr. Bankman-Fried, who is scheduled to go to trial in October. Last month, they announced they had filed a bank fraud count and three other charges against him. And just this week, they filed the foreign bribery charge, accusing Mr. Bankman-Fried of orchestrating a $40 million payment to at least one Chinese official in 2021 to unfreeze $1 billion in funds belonging to Alameda Research, his trading firm.

In court on Thursday, Mr. Bankman-Fried’s lawyer, Mark Cohen, said his client was challenging the charges. “My client pleads not guilty,” Mr. Cohen said.

Mr. Cohen also indicated that Mr. Bankman-Fried’s legal team might contest the government’s right to bring some of the additional charges. Mr. Bankman-Fried was extradited to the United States from the Bahamas, where FTX was based. In extradition cases, prosecutors are sometimes limited in bringing additional charges after a defendant is transferred to the United States for an initial indictment.

Meanwhile, the government has produced six million pages of documents to Mr. Bankman-Fried’s defense team, one of the prosecutors, Nicolas Roos, told the judge on Thursday. Mr. Roos said the F.B.I. was also looking to extract information from seven laptops and phones that belonged to Mr. Bankman-Fried and others involved in the case.

After he was extradited to the United States in December, Mr. Bankman-Fried was released on bail but confined to his parents’ home in Palo Alto, Calif., where he grew up. While under house arrest, he has hosted a procession of visitors and repeatedly tested the limits of the bail arrangement. He was chided by the judge for logging onto a virtual private network to watch football and using the encrypted messaging app Signal to contact a potential witness in his case.

On Tuesday, Judge Lewis A. Kaplan authorized a new set of bail conditions for Mr. Bankman-Fried, significantly curtailing his internet access. Under the new rules, which take effect next week, Mr. Bankman-Fried is permitted to use only two electronic devices — a laptop configured with limited internet access, and a phone with no internet connection.

Visitors are prohibited from bringing electronic devices into Mr. Bankman-Fried’s home. And Mr. Bankman-Fried will be required to pay for a security guard, who must screen all visitors using a metal detector.

But the bail conditions are the least of Mr. Bankman-Fried’s problems. The 13 counts he faces include charges of securities fraud, wire fraud and campaign finance violations. He is also accused of committing bank fraud by obscuring the links between FTX and Alameda.

In the updated charging document filed on Tuesday, federal prosecutors said that in 2021, Mr. Bankman-Fried instructed Alameda employees to pay a $40 million bribe to one or more unnamed Chinese officials to restore access to trading accounts maintained by Alameda that held about $1 billion in cryptocurrency. One of Alameda’s frozen accounts was at the crypto exchange Huobi, according to two people familiar with the matter; the exchange did not respond to a request for comment. Alameda relied on at least one Chinese speaker on staff to help unfreeze the funds, one of the people said.

The bribe was paid in cryptocurrency and succeeded in getting the trading accounts unfrozen, prosecutors said.

Prosecutors brought the bribery charge under the Foreign Corrupt Practices Act, a federal law that prohibits big corporations from paying bribes to operate in other countries.


Business News - Opportunities - Reviews



Leave a Reply