FTX co-founder Sam Bankman-Fried pleads not guilty to fraud, setting stage for a court trial

As expected, embattled crypto trader and co-founder of FTX Sam Bankman-Fried on Tuesday pleaded not guilty to fraud charges at a New York federal court.

Add WION as a Preferred Source

The eight charges levelled on Bankman-Fried were related to the collapse of FTX and hedge fund Alameda Research.

The charges vary from wire fraud to money laundering to campaign finance violations with five carrying a maximum sentence of 20 years in prison.

Read more:As top Democrat donor, Sam Bankman-Fried had access to White House: Report

With Bankman-Fried pleading not guilty, the stage is set for a court trial which is expected to begin in October, according to federal judge Lewis Kaplan.

The US prosecutors argued that the 30-year-old former billionaire misused the funds of FTX and Alameda Research whilst duping the customers.

WATCH |FTX founder Sam Bankman-Fried is 'ready to face music?'

Bankman-Fried, who was regarded as a crypto genius at the time quickly went to the Bahamas to avoid scrutiny by the US authorities. It was only after the request of the federal prosecutors in New York that he was sent to a prison on the island country where he spent nine days.

Banman-Fried was released on a $250 million bail package last month only after he accepted to be extradited out of the Bahamas. During the ruling, a US magistrate judge said Bankman-Fried would have to remain under strict supervision at his parents’ home in Palo Alto, California.

Read more: FTX co-founder Sam Bankman-Fried released on $250m bail

While Bankman-Fried is willing to do the whole nine yards in the court, his top lieutenants in Caroline Ellison, the former chief executive of FTX's trading affiliate Alameda Research, and Gary Wang, another FTX co-founder have already pleaded guilty.

What happened to FTX?

FTX filed for bankruptcy in November last year after traders rushed to remove $6 billion off the platform in only 72 hours. The fate of the company was sealed after rival exchange Binance's rescue deal fell through.

According to US Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC), Bankman-Fried masterminded the misappropriation of more than$8 billion in funds from customer accounts.

During one of the bankruptcy hearings, the attorneys representing FTX informed the court that Bankaman-Fried ran the now-bankrupt company as a 'personal fiefdom'. The attorneys said he splurged as much as $300 million on homes and vacation properties for senior staff, home and abroad.

(With inputs from agencies)

WATCH WION LIVE HERE: