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The Wall Street Journal reported on Dec. 30, 2022 that “SBF is likely to plead not guilty to fraud and other charges at his arraignment next week, according to the people familiar with the matter.”
So, FTX founder Sam Bankman-Fried (SBF) will probably plead not guilty to fraud and a bunch of other charges against him. United States prosecutors had charged SBF for engaging in the criminal activity that led to the collapse of his crypto exchange, FTX.
SBF was accused by the US authorities on Dec. 13, 2022 after his arrest in the Bahamas where he faced extradition. The US prosecutors in Manhattan brought out eight criminal counts against SBF. Federal Regulators noted that he had committed a range of securities and derivatives law violations.
On Jan. 3rd, 2023, SBF is likely to appear in person in New York to enter his plea, reportedly.
The plea by SBF for not guilty is expected as before his arrest he blamed the loss of customer funds on poor record management and a bank-account issue that allowed Alameda Research, FTX’s sister firm, to cover large losses with money destined for FTX.
On the other hand, SBF might be disagreeing his associates—Caroline Ellison, the former Chief Executive of Alameda Research, and Gary Wang, FTX’s former Chief Technology Officer—who have pleaded guilty to criminal offenses similar to those SBF was charged with. They are cooperating with the Federal investigators.
It must be noted that the unexpected fallout of the second largest crypto exchange, FTX, rattled the crypto industry. And the prosecutors alleged that SBF took billions of dollars of his firm’s customer money to pay the expenses and debts of his trading firm Alameda Research. Both firms filed for bankruptcy last month.
As of now the individual traders who entrusted FTX with their assets may face lengthy bankruptcy proceedings before they have a chance to lay hands on any of their funds.
In the previous week, SBF was released over a $250 Million bond and ordered to stay in his parents home in Palo Alto, California, after his appearance in a New York federal court.
SBF is also facing allegations from the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commision (CFTC). The SEC said in a civil lawsuit that “SBF diverted customer funds from FTX to support Alameda”. The CFTC filed a lawsuit against SBF, FTX and Alameda Research that states “SBF used FTX’s customer funds for a variety of personal expenditures.”
Nancy J. Allen is a crypto enthusiast, with a major in macroeconomics and minor in business statistics. She believes that cryptocurrencies inspire people to be their own banks, and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning. She frequently researches, and posts content on the top altcoins, their theoretical working principles and technical price predictions.
