FTX crypto CEO Sam Bankman-Fried pleads not guilty in Manhattan federal court

Bankman-Fried has been free on bond at his parents' home in California.

January 3, 2023, 3:08 PM

Disgraced crypto executive Sam Bankman-Fried pleaded not guilty to federal criminal charges in Manhattan on Tuesday and was tentatively scheduled to stand trial Oct. 2.

Bankman-Fried, instantly recognizable by his mop of unkempt hair, appeared before Judge Lewis Kaplan in a dark suit and tie. His mother sat behind him in the spectator benches.

The former CEO of bankrupt crypto exchange FTX did not speak during the hearing. His attorney, Mark Cohen, entered the not guilty plea on his behalf.

"He pleads not guilty to all counts," Cohen said.

Bankman-Fried has been charged with eight counts of fraud and conspiracy. Federal prosecutors have alleged Bankman-Fried orchestrated one of the "biggest financial frauds in American history" by steering billions in FTX customer and investor money and funneling it to his privately controlled hedge fund Alameda Research.

Other funds were used to buy lavish real estate and to make tens of millions in political donations, court records said.

PHOTO: FTX founder Sam Bankman-Fried leaves Manhattan Federal Court after his arraignment and bail hearings on Dec. 22, 2022, in New York.
FTX founder Sam Bankman-Fried leaves Manhattan Federal Court after his arraignment and bail hearings on Dec. 22, 2022, in New York.
Michael M. Santiago/Getty Images

The number of victims of the FTX fraud could exceed 1 million, a prosecutor said during Tuesday's hearing.

"FTX was the second-largest crypto exchange," the prosecutor, Danielle Sassoon, said.

Before his arrest last month, Bankman-Fried insisted in numerous interviews, including one with ABC News, that he did not know about any improper use of funds from customers of now-bankrupt crypto exchange FTX.

Bankman-Fried has been free on bond and subject to electronic monitoring while living at his parents' home in Palo Alto, California. The judge added a condition of release that prevents Bankman-Fried from accessing or transferring assets from FTX or Alameda Research.

Reflecting the complexity of the case, federal prosecutors announced Tuesday they were bringing additional resources to bear in an attempt to track down stolen billions that disappeared from FTX.

Bankman-Fried was extradited from the Bahamas, where he lived in a multimillion-dollar mansion, on Dec. 21.

Two of his former colleagues, Caroline Ellison and Gary Wang, have pleaded guilty and agreed to cooperate with prosecutors.

"We prepared certain quarterly balance sheets that concealed the extent of Alameda's borrowing and the billions of dollars in loans that Alameda had made to FTX executives and to related parties. I also understood that FTX had not disclosed to FTX's equity investors that Alameda could borrow a potentially unlimited amount from FTX, thereby putting customer assets at risk," Ellison said during her closed-door plea hearing last month, according to a transcript obtained by ABC News.

Ellison, former CEO of Alameda and girlfriend of Bankman-Fried, pleaded guilty to seven counts. Wang, co-founder of FTX with Bankman-Fried, pleaded guilty to to four counts.

Related Topics