By Jack Queen and Luc Cohen
NEWYORK -Sam Bankman-Fried is expected on Tuesday to enter a plea of not guilty to criminal charges that he cheated investors in his now-bankrupt FTX cryptocurrency exchange.
Bankman-Fried is accused of looting billions of dollars in FTX customer deposits to support his Alameda Research hedge fund, buy real estate and make millions of dollars in political contributions, in what prosecutors have called a fraud of epic proportions.
He is scheduled to appear at 2 p.m. EST (1900 GMT) before U.S. District Judge Lewis Kaplan in Manhattan. His lawyers earlier on Tuesday told Kaplan that Bankman-Fried’s parents, who co-signed his $250 million bond in December, have been harassed and threatened.
A person familiar with the matter told Reuters last week that Bankman-Fried would plead not guilty. A lawyer for Bankman-Fried did not reply to a request for comment. It is not unusual for criminal defendants to initially plead not guilty. Defendants are free to change their plea at a later date.
Bankman-Fried was extradited last month from the Bahamas, where he lived and where the exchange was based.
Since his release on bond, Bankman-Fried has been subject to electronic monitoring and required to live with his parents, Joseph Bankman and Barbara Fried, both professors at Stanford Law School in California.
In a letter, Bankman-Fried’s lawyers asked Kaplan to shield the names of two remaining sureties for the bond from public disclosure, citing the “steady stream of threatening correspondence, including a desire that they suffer physical harm” that his parents had received in recent weeks.
The lawyers, Mark Cohen and Christian Everdell, said the concern that additional sureties would face similar treatment overcame any public right of access to their identities. Kaplan has not yet ruled on their request.
Bankman-Fried has been charged with two counts of wire fraud and six conspiracy counts, including to launder money and commit campaign finance violations. He could face up to 115 years in prison if convicted.
The Massachusetts Institute of Technology graduate has admitted to making mistakes running FTX but said he did not believe he was criminally liable.
Bankman-Fried rode a boom in the value of bitcoin and other digital assets to become a billionaire several times over and an influential political donor in the United States, until FTX collapsed in early November after a wave of withdrawals. The exchange declared bankruptcy on Nov. 11.
The 30-year-old crypto mogul’s net worth, once estimated at $26 billion, was largely wiped out when the exchange collapsed. He later said that he had $100,000 in his bank account.
FTX‘s new chief executive, John Ray, known for his work on energy company Enron Corp’s bankruptcy, has said FTX was run by “grossly inexperienced” and unsophisticated people.