The founder and former CEO of bankrupt crypto exchange FTX faces court charges of alleged fraud. The 30-year-old has already apologized to his customers, but he has once again rejected allegations of fraud.
The founder of the collapsed cryptocurrency exchange FTX has, as expected, pleaded "not guilty" at a first hearing in a US court. The US authorities, however, accuse Sam Bankman-Fried of "fraud of epic proportions" and money laundering. He also violated party donation laws with his multi-million dollar donations for the candidacy of US President Joe Biden and his Democrats.
The actual process is likely to begin in September or October. If convicted, the 30-year-old faces up to 115 years in prison. Regardless, FTX customers plan to file a class action lawsuit. On bail of $250 million, Bankman-Fried will not be in custody for the time being, but is under arrest at his parents' house. Two FTX top executives have pleaded guilty.
After rumors of irregularities and a failed rescue by arch-rival Binance, investors withdrew money from FTX on a large scale in November 2022. The crypto exchange then applied for bankruptcy protection. According to insiders, Bankman-Fried secretly transferred $10 billion in FTX client funds to Alameda. Bankman-Fried admits mistakes, but rejects allegations of criminal acts.
FTX's bankruptcy trustee, John Ray, attributed the crypto exchange's debacle to the fact that "a very small group of extremely inexperienced and uneducated people" made all the major decisions at the company. "Never in my career have I seen such failures in corporate controls at every level of an organization, from the absence of financial statements to the complete absence of any internal controls or governance whatsoever," he said at a US congressional hearing.
