Sam Bankman-Fried pleads not guilty in FTX case

Fallen crypto billionaire Sam Bankman-Fried entered a plea of not guilty on Tuesday to criminal charges that he cheated investors and looted billions of dollars at his now bankrupt FTX cryptocurrency exchange.

Bankman-Fried is accused of illegally using FTX customer deposits to support his Alameda Research hedge fund, buy real estate and make millions of dollars in political contributions, in what prosecutors have called a fraud of epic proportions.

Judge Lewis Kaplan set a trial date for 2 October.

Bankman-Fried, eschewing his usual shorts and T-shirt for suit and tie, sat quietly through the short hearing in Manhattan, occasionally leaning over to talk to his lawyers.

It is not unusual for criminal defendants to initially plead not guilty. Defendants are free to change their plea at a later date.

Two senior co-workers, Alameda chief executive Caroline Ellison, and FTX co-founder Gary Wang, have pleaded guilty to criminal charges being slapped with civil and criminal charges alleging fraud and conspiracy.

The agreements indicate the pair have agreed to cooperate fully with the government. At a hearing last month, Ellison apologized to FTX customers and investors, saying she knew what she did was wrong.

Prosecutors say that from 2019 through November, Bankman-Fried misled investors on the financial condition of Alameda, and defrauded the Federal Election Commission by funneling $70m in illegal contributions to political candidates.

Bankman-Fried has admitted to making mistakes running FTX but said he did not believe he was criminally liable.

In a series of rambling interviews, before he was detained and returned to the US by an FBI extradition team, he blamed the loss of funds on bad record-keeping and a bank-account issue that allowed Alameda to cover losses with FTX funds.

The 30-year-old crypto mogul rode a boom in the value of bitcoin and other digital assets to become a billionaire several times over and an influential political donor in the United States, until FTX collapsed in early November after a wave of withdrawals. The exchange declared bankruptcy on 11 November.

Reuters contributed to this article