Sam Bankman-Fried enters a not-guilty plea for bribery, while the 3AC founder is given an ultimatum

Sam Bankman-Fried pleaded not guilty to bribing Chinese officials to access Alameda trading accounts.

Former FTX CEO Sam Bankman-Fried has pleaded not guilty to bribery and campaign finance violations. At the same time, Three Arrows Capital founder Kyle Davies is given two weeks to respond to a subpoena.

At a hearing before Judge Lewis Kaplan, Bankman-Fried’s attorney Mark Cohen pleaded not guilty to bribery and campaign finance allegations on behalf of the former FTX executive.

Cohen said he would contest the allegations because they were brought after Bankman-Fried was expelled from the Bahamas.

In February 2023, prosecutors filed a superseding indictment against Bankman-Fried, adding four new allegations to the eight initially filed in December 2022. Yesterday, it was reported that a revised charge included a new allegation of corrupting Chinese officials to gain access to suspended trading accounts associated with Bankman-Fried’s market-making firm, Alameda Research.

Accordingly, Sam Bankman-Fried has now pleaded not guilty to thirteen criminal counts, blaming inadequate risk management for the collapse of the exchange he led.

At his parents’ Palo Alto residence, he awaits his trial on October 2, 2023, on a $250 million recognizance bond.

In November 2022, FTX filed for bankruptcy because it lacked the liquidity to honor customer withdrawals. Simultaneously, Sam Bankman-Fried handed over the reins of leadership to bankruptcy expert John Ray.

As a result of the crypto market collapses of 2022, numerous executives of defunct companies have made statements about making consumers whole. Many of these claims, however, have yet to materialize, leaving creditors to question when they receive the funds they held on a cryptocurrency platform.

Sam Bankman-Fried stated that the company could have made consumers whole within a month had it not declared bankruptcy. He later claimed that FTX’s U.S. branch had sufficient funds to compensate customers. This claim contradicted the findings of FTX’s bankruptcy attorneys, Sullivan & Cromwell.

According to recent reports, Sam Bankman-Fried invested in a lesser-known Bahamian hedge fund. FTX attorneys reportedly obtained $400 million from the fund.

Su Zhu, a co-founder of the now-defunct Singaporean hedge fund Three Arrows Capital, recently established a new exchange for trading bankruptcy claims. In February 2023, liquidators appointed to supervise the hedge fund liquidation complained that Zhu and co-founder Kyle Davies had failed to cooperate. The absence of cooperation contradicts Zhu’s pledge to resolve insolvency issues at the exchange.

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