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Bankman-Fried May Enter Plea in NY Federal Court Next Week Before Judge Lewis Kaplan

Bankman-Fried has repeatedly stated that he does not believe he is responsible for FTX’s demise, but his colleagues have already pleaded guilty.

According to court records, former FTX CEO Sam Bankman-Fried is scheduled to appear in court on the afternoon of Jan. 3 to enter a plea on two counts of wire fraud and six counts of conspiracy in connection with the collapse of the FTX cryptocurrency exchange. Bankman-Fried will appear in Manhattan before District Judge Lewis Kaplan.

Judge Kaplan took over the case on December 27 after the original judge, Ronnie Abrams, recused herself due to connections between FTX and the law firm Davis Polk & Wardwell, where her husband is a partner. In 2021, the firm provided advisory services to FTX.

Kaplan was nominated in 1994 by US President Bill Clinton and is known for his straightforward demeanor and efficient handling of courtroom procedures.

Bankman-Fried stated repeatedly prior to his arrest that he does not believe he is criminally liable for his actions as FTX CEO, claiming that it was simply an accounting blunder that resulted in him “unknowingly commingling funds” of Alameda and FTX customers. “I don’t find any such statements credible,” said John Ray, Bankman-successor Fried’s at FTX, during a hearing of the United States House of Representatives Financial Services Committee.

Ray has been harsh in his criticism of Bankman-management Fried’s of the cryptocurrency exchange he cofounded. “Never in my career have I seen such an utter failure of corporate controls at every level of an organization, from the lack of financial statements to a complete failure of any internal controls or governance whatsoever,” Ray said in written testimony ahead of the House hearing.

Bankman-Fried is currently residing in California with his parents on $250 million bail, a portion of which is made up of the equity in his parents’ home. Bankman-release Fried’s was also subject to several conditions, including mental health and substance abuse evaluation and treatment.

Caroline Ellison and Gary Wang, members of his inner circle at FTX and the related trading firm Alameda Research, have pleaded guilty and agreed to cooperate with the prosecution, announced U.S. Attorney for the Southern District of New York Damian Williams on December 22. The agreement with Ellison and Wang had been reported prior to that date, but it was kept secret until Bankman-Fried agreed to extradition from the Bahamas.

Nishad Singh, the former director of engineering, and Sam Trabucco, the former co-CEO of Alameda Research with Ellison who resigned on August 24, are not charged at this time.

 

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