Sam Bankman-Fried pleads not guilty to the charges following the collapse of the FTX exchange

30-year-old founder Cryptocurrency exchanges FTX is accused of stealing deposits from the exchange to fund its hedge fund AlamedaResearch. With this money, he was also supposed to finance political campaigns and buy real estate. Two other people working for Bankman-Fried have already pleaded guilty and made extensive statements.

Prosecutors call it "epic deception", but Bankman-Fried pleaded not guilty during the first interrogation. He is accused of a total of 8 prohibited acts, including min. electronic fraud, money laundering, as well as stealing FTX customer deposits to support his hedge fund Alameda Research, buying real estate and donating millions of dollars to political causes.

– Customer funds were used and laundered through political donations, charitable donations and various high-risk investments – said Danielle Sassoon, a federal prosecutor, at the first trial.

She also made it clear that this is not a trial tactic, because the prosecutor's office has strong evidence to defend its theses. These are not only hundreds of thousands of documents, but also testimonies of repentant witnesses. Among them are e.g. former chief executive officer of the Alameda Fund, Caroline Ellison, who was previously the defendant's partner.

In court, Sam Bankman-Fried appeared in a blue suit, white shirt and blue polka dot tie. This is a big image change, because so far he has mainly worn t-shirts. Despite this, he tried to act cool, smiling, and after the trial, approaching the cartoonists (in the US, you are not allowed to take photos during court hearings) and jokingly assessing their attempts to reproduce his current image.

Massachusetts Institute of Technology graduate faces up to 115 years in prison.

From zero to billionaire

Recall: Sam Bankman-Fried built a huge FTX cryptocurrency exchange, which was valued at USD 26 billion. In November, however, massive withdrawals of funds from the exchange began, which also resulted in rapid drops in the valuation of its native token. It turned out that the exchange's reserves are located in it, so everything went quickly. Especially since - as the prosecutor's office argues - the money was taken out of the company. Bankman-Fried himself claims that he has only 100 in his bank account. USD.

Meanwhile, the prosecution maintains that the diversion of assets from Sam Bankman-Fried companies continued even after it was already known that FTX collapses. It is known that the funds were transferred from Alameda's cryptocurrency wallets, although there is no evidence (yet) that it was Bankman-Fried who performed these transactions.

Bankman-Fried's lawyer, Mark Cohen, said his client, who was already aware of the Bahamas court rulings last month, temporarily seized some of FTX's assets, said it was not the case. So who was able to transfer these funds? There is no answer to this question yet.

From billionaire to living with parents

Last month, the founder of the cryptocurrency exchange FTX was extradited from the Bahamas, where he lived. He was arrested right away.

On December 22, 2022, he was released from prison on $250 million bail. is electronically monitored and required to live with… his parents: Joseph Bankman and Barbara Fried, professors at Stanford Law School in California. Since the collapse of FTX, parents have received numerous threats from people who lost their fortunes due to the collapse of FTX.