FTX Founder Sam Bankman-Fried pleads not guilty to criminal charges

Category: Americas Crypto Fintech

Sam Bankman-Fried, the founder of cryptocurrency exchange FTX, has pleaded not guilty to criminal charges accusing him of leaking messages from the former head of the FTX affiliated hedge fund, Alameda Research.

Caroline Ellison is a key witness in the ongoing criminal case against Bankman-Fried. The charges were brought forward by US prosecutors who allege that Bankman-Fried attempted to interfere with the fairness of the trial by discrediting Ellison, who had previously pleaded guilty to fraud and was cooperating with law enforcement.

Ellison and Bankman-Fried were former colleagues

The allegations stem from a piece published in The New York Times, where Caroline Ellison was reported to have written in a private document in February 2022 about her dissatisfaction and stress related to her job. The leaked document describes her expressing a desire to disconnect from work and “unwind with a drink”. Ellison had a history with Bankman-Fried, as they were former traders at the Wall Street firm Jane Street. She later joined him at FTX in 2019 to manage Alameda Research.

The criminal case against Bankman-Fried gained traction after FTX faced a collapse last year, and prosecutors accused Alameda Research of engaging in unauthorized trading with billions of dollars of FTX customer deposits. Ellison’s plea agreement with the US government was announced while Bankman-Fried was in transit from the Bahamas after agreeing to be extradited to New York. During a court hearing in December 2022, Ellison revealed that Alameda had undisclosed access to a substantial line of credit on FTX.com. She also admitted knowing that their actions were wrong.

Romantic breakup

Prosecutors emphasized that Bankman-Fried’s lawyer had confirmed the meeting between the entrepreneur and a New York Times journalist, during which he allegedly shared documents related to Ellison. The leak of the private messages, according to prosecutors, was not only intended to harass Ellison but also aimed to discourage other potential trial witnesses from testifying.

The New York Times article also mentioned the emotional aspect of Ellison’s relationship with Bankman-Fried, addressing the pain caused by their romantic breakup and its impact on her feelings towards Alameda Research.

Bankman-Fried’s trial is scheduled for October and Ellison is expected to be one of main significant witnesses. Other key witnesses include former FTX co-founder Gary Wang and former FTX engineer Nishad Singh, who have already pleaded guilty in their respective criminal cases.

As of now, neither Bankman-Fried’s spokesperson nor Ellison’s lawyers have responded to requests for comment. The New York Times has declined to make a statement regarding the matter.

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