FTX Collapse Update: Bankman-Fried to Enter Plea Next Week

According to court documents released on Wednesday, Sam Bankman-Fried, the founder of FTX, is anticipated to enter a plea in his hundreds of millions of dollars cryptocurrency fraud case next week.

According to Reuters, Bankman-Fried is scheduled to appear in court on January 3 and is anticipated to enter a plea. Judge Lewis A. Kaplan of the Manhattan Federal Court gained control of the case on Tuesday after the original judge withdrew her participation.

Following Bankman-Fried’s resignation, John Ray III took over as CEO. During his testimony before the House Financial Services Committee, Ray detailed a number of anomalies and questionable business practices at FTX.

The corporation’s collapse appears “to stem from the absolute concentration of control in the hands of a very small group of grossly inexperienced and unsophisticated individuals who failed to implement virtually any of the systems or controls that are necessary for a company that is entrusted with other people’s money or assets,”  according to Ray, whose job was to clean up the damage.

The other CEO of the now-bankrupt FTX Derivatives Exchange, Ryan Salame, informed the Bahamian regulators that funds belonging to customers were secretly transferred from FTX to its sister trading company Alameda Research. This information was included in a court document filed on December 14th.

FTX Founder out on $250M Bail Bond

Bankman-Fried was extradited to the United States after being detained in the Bahamas, where FTX is incorporated. 

He is accused with six charges of conspiracy, including conspiring to launder money and break campaign finance laws, and two counts of wire fraud. 

He was released on $250 million bail and is now confined to his parents’ California home with an electronic monitoring bracelet. He could spend more than a century behind bars if found guilty on all counts.

His coworkers have now exposed him, as company partners Gary Wang, 29, and Carolyn Ellison, 28, pleaded guilty to fraud charges in Manhattan Federal Court and cooperated with the prosecution in exchange for leniency in punishment.