FTX founder Sam Bankman-Fried will likely plead not guilty to defrauding the firm’s investors.
That’s according to a report published by Reuters Tuesday (Jan. 3), the same day Bankman-Fried is due in court to answer charges that he carried out a multibillion-dollar fraud that led to the downfall and bankruptcy of one of the world’s largest cryptocurrency exchanges.
Bankman-Fried will be arraigned Tuesday in federal court in Manhattan, charged with eight counts of fraud and conspiracy.
It is not unusual for a defendant to plead not guilty during their arraignment, which is the formal reading of charges in the defendant’s presence to ensure they are aware of the charges.
Prosecutors have accused Bankman-Fried of both conspiring to commit and carry out “fraud of epic proportions.” He could face decades in prison if found guilty.
He posted bail after being extradited to the U.S. from FTX’s home base of the Bahamas. He is under supervised bond release and living at his parents’ home on the Stanford University campus, where both his mother and father are teachers.
Last month saw reports that two of Bankman-Fried’s former had pleaded guilty to fraud and were cooperating with the prosecution.
Caroline Ellison, former CEO of FTX sister firm Alameda Research, and Gary Wang, FTX’s former chief technology officer, have both pleaded guilty to fraud.
News of Bankman-Fried’s plea comes days after reports that prosecutors were looking into more than $1 million in transactions involving crypto wallets tied to Bankman-Fried.
Bankman-Fried’s bail conditions bar him from making financial transactions greater than $1,000, except for legal expenses or if he gets permission from the courts or government. The FTX founder took to Twitter last week to deny making the transactions.
“None of these are me,” he said in one tweet. “I’m not and couldn’t be moving any of those funds; I don’t have access to them anymore.”
Meanwhile, FTX and its creditors continue to try to work themselves out of a legal and regulatory quagmire. Last week saw the company and its debtors announce that cryptocurrency transferred from the firm on Nov. 12 belongs to the FTX Debtors and was taken without authorization by the Securities Commission of the Bahamas.
The commission announced it had seized $3.5 billion from FTX Nov. 12, one day after FTX sought bankruptcy protection in federal court.
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