FTX Crypto Founder Bankman-Fried’s Plea Expected Next Week

In the wake of news that his former friends and peers are cooperating with authorities, FTX crypto founder Sam Bankman-Fried is expected to enter a plea at his criminal arraignment in Manhattan, New York, next week.

Whether that plea proclaims his guilt or innocence remains to be seen, but Reuters reported Wednesday (Dec. 28) that the disgraced founder of the since-failed FTX cryptocurrency exchange is scheduled to appear before a judge on Jan. 3, 2023, in federal court in New York City, according to court documents.

He’ll be arraigned before Judge Lewis Kaplan. The previous judge overseeing Bankman-Fried’s criminal case, Ronnie Abrams, recused herself last week (Dec. 23) because her husband is a partner at Polk Davis & Wardell, a law firm that advised Bankman-Fried’s cryptocurrency company FTX last year. Abrams’ husband, Greg Andres, was not associated with the FTX work.

Bankman-Fried has been charged by the U.S. Department of Justice (DOJ) with eight criminal counts that range from wire fraud to various conspiracy counts. Bankman-Fried has maintained his innocence in the events that led to the rapid implosion of his crypto empire and the loss of billions of misallocated customer funds.

An arraignment is the formal reading of criminal charges against a defendant in that defendant’s presence. Its purpose is to ensure the accused is properly aware of the charges.

After being read the charges, a defendant may enter a plea or — depending in which legal jurisdiction the arraignment is being held — may choose not to submit one.

The news of his expected plea follows the news, as reported by PYMNTS, that both Caroline Ellison, former CEO of FTX sister firm Alameda Research, and Gary Wang, FTX’s former chief technology officer, have pleaded guilty to the fraud charges brought against them and agreed to cooperate with authorities.

That news, which was kept embargoed from the media until Bankman-Fried was extradited to the U.S., has no doubt put pressure on the one-time wunderkind of crypto.

In Ellison’s testimony, she described and admitted guilt to a number of fraudulent acts she claims to have participated in going back to 2019.

Prosecutors have accused Bankman-Fried of both conspiring to commit and engaging in “fraud of epic proportions.” If convicted, he faces decades in prison.

He is currently under supervised bond release and residing at his parents’ home on the Stanford University campus.

For all PYMNTS crypto coverage, subscribe to the daily Crypto Newsletter.