NEW YORK, Dec. 30 (Reuters) – Sam Bankman-Fried is expected to enter a plea on Tuesday not guilty of criminal charges that he defrauded investors and looted billions of dollars at his now-bankrupt FTX cryptocurrency exchange, according to a known source with the case.
Bankman-Fried is accused of illegally using customer FTX funds to support his Alameda Research hedge fund, purchase real estate and make millions of dollars in political contributions.
He will appear before U.S. District Judge Lewis Kaplan in Manhattan on Tuesday at 2 p.m. EST (1900 GMT) to enter a plea.
A Bankman-Fried lawyer did not immediately respond to a request for comment.
It is not uncommon for criminal defendants to initially plead not guilty. Defendants are free to change their plea at a later date.
Bankman-Fried has been released on $250 million bail following his extradition last month from the Bahamas, where he lived and where the exchange was based.
Since his release, Bankman-Fried has been subject to electronic surveillance and must live with his parents, both professors at Stanford Law School in California.
The Massachusetts Institute of Technology graduate has been charged with two counts of wire fraud and six counts of conspiracy, including money laundering and campaign finance violations. He could face up to 115 years in prison if convicted.
Bankman-Fried has admitted to making mistakes in running FTX, but said he did not believe he was criminally liable.
The 30-year-old crypto magnate soared in the value of bitcoin and other digital assets to become a multi-billionaire and an influential political donor in the United States, until FTX collapsed in early November after a wave of withdrawals. The exchange went bankrupt on November 11.
The prosecution case was bolstered by last month’s IOUs by two close associates of Bankman-Fried.
Caroline Ellison, the CEO of Alameda, and Gary Wang, the former chief technology officer of FTX, pleaded guilty to seven and four charges, respectively, and agreed to cooperate with prosecutors.
Ellison told prosecutors she agreed with Bankman-Fried to hide from FTX’s investors, lenders and clients that the hedge fund could borrow unlimited amounts from the exchange, according to a transcript of her Dec. 19 plea hearing.
Reporting by Jack Queen; Additional reporting by Chris Prentice; Edited by Noeleen Walder and Daniel Wallis
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