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FTX crypto CEO Sam Bankman-Fried expected to plead not guilty in court Tuesday

ABC News

(NEW YORK) — Disgraced crypto executive Sam Bankman-Fried is likely to plead not guilty to an eight-count fraud and conspiracy indictment when he appears in Manhattan federal court Tuesday, a person familiar with the matter told ABC News.

Federal prosecutors have alleged Bankman-Fried orchestrated one of the “biggest financial frauds in American history” by steering billions in FTX customer and investor money and funneling it to his privately controlled hedge fund Alameda Research. Other funds were used to buy lavish real estate and to make tens of millions in political donations, court records said.

Before his arrest last month, Bankman-Fried insisted in numerous interviews, including one with ABC News, that he did not know about any improper use of funds from customers of now-bankrupt crypto exchange FTX.

Bankman-Fried has been free on bond and subject to electronic monitoring while living at his parents’ home in Palo Alto, California.

Two of his former colleagues, Caroline Ellison and Gary Wang, have pleaded guilty and agreed to cooperate with prosecutors.

“We prepared certain quarterly balance sheets that concealed the extent of Alameda’s borrowing and the billions of dollars in loans that Alameda had made to FTX executives and to related parties. I also understood that FTX had not disclosed to FTX’s equity investors that Alameda could borrow a potentially unlimited amount from FTX, thereby putting customer assets at risk,” Ellison said during her closed-door plea hearing last month, according to a transcript obtained by ABC News.

Ellison, former chief of Alameda and an ex-girlfriend of Bankman-Fried, pleaded guilty to seven counts. Wang, cofounder of FTX with Bankman-Fried, pleaded guilty to to four counts.

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