Sam Bankman-Fried (SBF) pleads not guilty to five new charges, including bribery and bank fraud, in relation to the collapse of FTX and Alameda Research.
Former FTX CEO Sam Bankman-Fried (SBF) has entered a plea of not guilty in federal court to five new charges relating to the collapse of his crypto exchange FTX and hedge fund Alameda Research. The U.S. Attorney’s Office for the Southern District of New York revealed a third set of criminal charges against the former crypto billionaire in an unsealed indictment on Tuesday. The charges this time focused on allegations that SBF bribed a foreign government. His defense team plans to file a motion so that he doesn’t face all counts.
New Charges Explained
The charges include bank fraud, money laundering, and operating an unlicensed money-transmitting business. They also include making unlawful political contributions in the United States. The indictment gives details of hundreds of political donations that SBF allegedly directed, violating federal campaign finance laws.
Already facing eight other counts, SBF is also accused of bribing Chinese officials with at least $40 million in cryptocurrency to unfreeze trading accounts associated with his crypto hedge fund. That fund held approximately $1 billion in cryptocurrency.
SBF after collecting every possible federal charge pic.twitter.com/fKBjeVePgq
— Genevieve Roch-Decter, CFA (@GRDecter) March 28, 2023
Prosecutors say that after various attempts to unfreeze the accounts failed, SBF agreed to and directed the bribe to have the accounts unlocked. Alameda Research then reportedly used the unfrozen assets to continue funding its loss-generating trades, committing what the government alleges was a fraud against customers and investors for another year.
During the hearing, SBF remained silent, while his attorney, Mark Cohen, indicated plans to challenge the new charges. SBF’s defense team will argue that the charges violate the U.S.-Bahamas treaty. The treaty allows individuals extradited to the US to be tried only on the charges for which they were extradited.
FTX and Alameda Research collapsed in November following concerns about their balance sheets, resulting in a bank run. SBF also faces civil charges from the Commodity Futures Trading Commission and the Securities and Exchange Commission. Meanwhile, FTX remains embroiled in bankruptcy court proceedings in Delaware.
The allegations against SBF highlight the risks of cryptocurrency trading and the importance of transparency and regulation in the industry. His plea of not guilty, however, means that the charges are still allegations. Authorities have not yet proven the charges in court. Nonetheless, the case demonstrates the importance of due diligence and regulatory oversight in the cryptocurrency space.