Benkman-Fried, who is charged with eight separate counts, including email fraud and political campaign financing with policy violations, pleads not guilty.
When the ex-director of the bankrupt crypto exchange FTX first appeared in court, he was released on personal bond and returned to his parents’ home in California. The second time Benkman-Fried visited the New York courthouse on Tuesday, January 3, and pleaded not guilty, which, according to preliminary reports from the WSJ, was quite expected.
Assistant prosecutor Danielle Sassoon said the bulk of the investigation should be completed in the coming weeks, after which the government will release the case file, including documents provided by FTX’s bankruptcy attorneys.
Judge Lewis Kaplan also granted Benkman-Fried’s claim to withhold the names of the two people who, along with Sam’s parents, posted $250 million bail for him. The media can challenge this decision until January 12.
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Also, Benkman-Fried was banned from accessing FTX assets and making any transactions with them.
“These funds are not currently available for withdrawal by the government,” said Danielle Sassoon.
The assistant prosecutor recalled the discovery last week when several Alameda wallets began moving thousands of dollars worth of cryptocurrencies to other wallets.
Sassoon also said that although Benkman-Fried tweeted that he was not involved in these transactions, he had previously “posted erroneous statements.”
None of these are me. I’m not and couldn’t be moving any of those funds; I don’t have access to them anymore.https://t.co/5Gkin30Ny5
— SBF (@SBF_FTX) December 30, 2022
Benkman-Fried was arrested last month in the Bahamas after being questioned by federal prosecutors alleging that he misappropriated customer deposits, using the funds to pay the expenses and debts of FTX subsidiary Alameda Research, while concealing information about FTX’s real financial condition.
Sam Benkman Fried. Photo: Reuters
Yesterday’s court motion stipulates that the next hearing will take place on October 2, 2023. Lawyers for Benkman-Fried have until April 3 to challenge the decision, while federal prosecutors have until April 24 to respond. In the future, both parties may present their arguments at the May 18 hearing.
Earlier, two top managers of FTX pleaded guilty and announced their cooperation with the prosecutor’s office:
Caroline Ellison, former CEO of FTX subsidiary Alameda Research and ex-girlfriend of Sam Benkman-Fried, has pleaded guilty to seven counts and faces up to 110 years in prison. FTX co-founder Gary Wong pleaded guilty to four counts and faces up to 50 years in prison.
Ex-girlfriend of Benkman-Frida and director of FTX subsidiary pleaded guilty to fraud – she faces up to 110 years in prison
Both are convicted for “their role in the fraud that contributed to the collapse of FTX,” Demian Williams, Attorney for the Southern District of New York, told a news conference.
Statement of U.S. Attorney Damian Williams on U.S. v. Samuel Bankman-Fried, Caroline Ellison, and Gary Wang pic.twitter.com/u1y4cs3Koz
— US Attorney SDNY (@SDNYnews) December 22, 2022
Source: Coindesk
On November 2, Coinbase released a report showing that Sam Benkman-Fried’s crypto exchange was facing a liquidity crisis. In response to the article, Binance CEO Changpeng Zhao announced that the company would sell FTT (FTX token) for around $529 million, after which the token dropped over 70% to around $6. Later, it was reported that Binance was buying FTX, and the owners signed a “letter of intent” – which, in fact, meant that the agreement was not binding. Subsequently, Zhao, having read FTX’s financial documents, changed his mind about saving the competitor. The failure of FTX caused the spread of infection, which led to financial problems in several other companies. The flagship cryptocurrency, bitcoin, was predicted to fall below $12,000. On November 11, FTX filed for bankruptcy. Sam Benkman-Fried stepped down and was replaced by Enron reorganization veteran John J. Ray III as CEO. About 130 additional subsidiaries, including FTX US and Alameda Research, have also filed for bankruptcy. A few weeks later, it became known that a significant amount of the assets of the crypto exchange disappeared or were stolen. In December, reports surfaced that U.S. Attorney’s Office was investigating Sam Benkman-Fried for his possible involvement in the “death spiral” of the TerraUSD (UST) stablecoin and its associated Luna token. A few days later, the founder of FTX was arrested in the Bahamas after the US government brought criminal charges against Benkman-Fried and announced its intention to seek his extradition from the country where he lived and which served as the base of operations for FTX.
