Sam Bankman-Fried to plead guilty in FTX fraud case

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Regulation
Sam Bankman-Fried to plead guilty in FTX fraud case

Sam Bankman-Fried, the once-lauded CEO of cryptocurrency exchange FTX, is expected to plead guilty next week to a slew of criminal charges. According to court documents, Bankman-Fried stands accused of defrauding investors and pocketing billions of dollars in customer funds. 

SBF’s case taken over by Judge Kaplan in Manhattan

The CEO’s crypto empire was seemingly built on lies and deception. The ‘FTX wonderkind’ is due in court on Jan.3, 2023. 

According to court records, the alleged scammer is scheduled to be tried in Manhattan federal court on the afternoon of Jan.3, 2023, by US District Judge Lewis Kaplan. After the initial judge withdrew because her partner’s law company had counseled FTX before its demise, Kaplan was appointed to the case on Tuesday.

Authorities claim that Bankman-Fried committed a multi-year fraud by usurping client funds to finance Alameda Research, which isn’t legal. SBF also purchased luxury real estate and donated to political campaigns, including the 2020 presidential campaign of current US President Joe Biden.

SBF is also accused of two charges of wire fraud, and he may face a lengthy prison sentence. Of course, as Biden’s second-largest presidential campaign donor – SBF might get the big pardon!

SBF’s associates plead guilty in connection to FTX collapse

Former Alameda CEO Caroline Ellison and former FTX Chief Technology Officer Gary Wang, two of his allies, pled guilty to their involvement in the demise of FTX and consented to assist authorities.

Bankman-Fried was allowed to reside with his parents in Palo Alto, California, where they are Stanford Law School professors, and was freed on a $250 million bond on December 22. He is being watched electronically.

According to John Ray, the company’s new CEO, FTX lost $8 billion in customer funds while being run by “grossly inexperienced, non-sophisticated individuals.” Bankman-Fried said there had been poor risk management at FTX before his arrest on December 12 but insisted he did not think he was legally responsible.

With bankruptcy proceedings underway and the future of FTX uncertain, it remains to be seen how this saga will ultimately conclude.

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Wayne Jones

Wayne is an all-rounded cryptocurrency writer who has written for several publications in the fintech industry. Having graduated from the University of Essex Colchester, he developed a passion for blockchain technology and has been curious about how the blockchain can modify the traditional financial industry.