FTX founder Sam Bankman-Fried pleads not guilty to fraud, other crimes

Disgraced FTX founder Sam Bankman-Fried pleaded not guilty on Tuesday to charges of wire fraud, securities fraud and other counts related to the collapse of his cryptocurrency trading platform. 

Prosecutors have alleged that Bankman-Fried, 30, illegally used his customers’ money to make real estate purchases, political donations and investments at his hedge fund, Alameda Research. 

He was arrested in the Bahamas last month after FTX filed for bankruptcy in November as a result of being unable to provide billions of dollars in withdrawal requests from its customers. 

Bankman-Fried agreed to be extradited from the Bahamas, where he lived and ran the company, to face charges in Manhattan a week after he was arrested. 

Mark Cohen, Bankman-Fried’s attorney, said in court on Tuesday that his client was pleading not guilty to all eight charges against him. 

Bankman-Fried was released on $250 million bail two weeks ago on the condition that he wears an electronic monitoring device and awaits trial at his parents’ house in Palo Alto, Calif. 

Two of Bankman-Fried’s close associates have already pleaded guilty to charges of fraud related to FTX’s collapse and agreed to cooperate with prosecutors. Caroline Ellison ran Alameda, while Gary Wang co-founded FTX. 

U.S. Attorney Damian Williams announced ahead of Bankman-Fried’s arraignment that he is creating a task force to investigate and prosecute issues stemming from FTX’s collapse. He said the task force will also work to recover lost assets for customers. 

The Associated Press contributed to this report.