Sam Bankman-Fried, the founder of bankrupt crypto exchange FTX, once hailed as the Jewish king of cryptocurrency, pleaded not guilty to criminal charges on Tuesday, setting up a high-stakes legal battle as he faces up to 115 years in prison.
The 30-year-old entrepreneur, also known as SBF, who is out on a $250 million bond, was arraigned in federal court in New York on Tuesday, flanked by attorneys and with his mother, Barbara Fried, sitting behind him. Attorney Mark Cohen entered the plea of not guilty to all counts. Bankman-Fried flew from California to New York to enter his plea in person during a court hearing at the US District Court for the Southern District in Lower Manhattan.
The judge set a trial date for October 2, 2023.
FTX, which was one of the largest cryptocurrency exchanges in the world, imploded in November amid questions about the integrity of its financials and its relationship to Alameda Research, a crypto hedge fund SBF also founded.
Currently, more than one million creditors, including FTX customers, are trying to recover money that may be gone permanently.
Bankman-Fried's not-guilty plea pits him against two former business partners, top executives at the companies he was involved with.
Gary Wang, who co-founded FTX, and Caroline Ellison, the former CEO of Alameda Research, both pleaded guilty to fraud charges and are cooperating with prosecutors.
Who is Sam Bankman-Fried (SBF)? The rise and fall of the Jewish king of crypto
Sam Bankman-Fried, also known as SBF, hails from an upper-middle-class family of Jewish academics and grew up steeped in higher education.
Starting out his career at global proprietary trading firm Jane Street Capital, SBF opened up the Alameda Research trading firm and soon got into the cryptocurrency game.
In late 2018, SBF moved to Hong Kong and by early 2019 he opened up the FTX cryptocurrency exchange.
Based in the Bahamas, FTX achieved renown as one of the most stable and reliable players in the crypto field.
In his position, SBF made use of his assets for what he described as Effective Altruism, bailing out ailing digital asset firms and donating his money, including to many causes aligned with the Democratic Party.
At his peak, SBF's crypto investments and business activities proved to be incredibly profitable. Estimates had placed SBF's net worth at $26 billion at his peak, though he averaged around $10-$16 billion in October.
Despite this, SBF famously eschewed most material pleasures associated with the super-rich, having little in the way of physical material assets like fancy cars, clothes or jewelry.
But everything changed come November when FTX came crashing down.
This happened on November 8 when Binance, the world's largest cryptocurrency exchange, announced it would try to purchase FTX, which had undergone a liquidity crisis after the firm sold its holdings in the FTX token FTT, completely tanking the token's worth. By November 9, Binance pulled out.
By the end of it all, SBF lost his billionaire status. SBF made a new record for the Bloomberg Billionaires Index, which said that his net worth dropped by 94% in just a single day, plummeting to a mere $991 million, though current estimates say he has no material wealth whatsoever and a net worth far closer to 0.
He resigned as CEO of FTX, which has since declared bankruptcy.