Former FTX CEO Sam Bankman-Fried has pleaded not guilty to bribery and campaign finance law violations after a US bankruptcy court ordered Three Arrows Capital founder Kyle Davis to respond to a subpoena within two weeks.
Bankman-Fried’s attorney Mark Cohen pleaded not guilty to the bribery and campaign finance charges on behalf of the former FTX boss in a hearing before Judge Lewis Kaplan.
Sam Bankman-Fried pleads not guilty again
Cohen said he would fight the charges because they were filed after Bankman-Fried was deported from the Bahamas.
Prosecutors filed a superseding indictment against Bankman-Fried in February 2023, adding four of the charges to eight indictments filed in December 2022. Yesterday, reports surfaced of an amended indictment including a new allegation of bribing Chinese officials to access frozen trading accounts linked to the banker. Fried’s market-making firm, Alameda Research.
Accordingly, Sam Bankman-Fried has now pleaded not guilty to thirteen criminal counts alleging the exchange’s collapse was led by poor risk management.
Out on a $250 million recognizance bond, he awaits trial at his parents’ Palo Alto home on October 2, 2023.
FTX filed for bankruptcy in November 2022, as it lacked the liquidity to honor customer withdrawals. At the same time, Sam Bankman-Fried stepped down, handing over the leadership reins to bankruptcy expert John Ray.
Crypto Executive Fails to Deliver on Big Promises
The crypto collapse of 2022 has seen many executives of failed companies make grand statements about making customers whole. However, many of those claims have failed to materialize, leaving creditors to wonder when they will receive the funds held on the crypto platform.
Sam Bankman-Fried said that instead of filing for bankruptcy, the firm was able to meet customers within a month. He later claimed that the US branch of FTX had enough money to make clients perfect. This claim was contrary to the findings of FTX’s bankruptcy attorneys Sullivan & Cromwell. Ray later denied the claims in a congressional hearing and is trying to recover the money from multiple sources.
Recent reports have revealed that FTX lawyers received approximately $400 million from a little-known Bahamian hedge fund invested in by Sam Bankman-Fried.
Hsu Zhu, the co-founder of defunct Singaporean hedge fund Three Arrows Capital, recently launched a new exchange to trade bankruptcy claims. Liquidators appointed to oversee the hedge fund’s liquidation complained in February 2023 that Zhu and co-founder Kyle Davis had failed to cooperate. The lack of cooperation belies Zhu’s earlier commitment to resolve insolvency issues at the exchange.
The silence also delayed the reimbursement of creditors, the liquidators argued, and was a neglect of Davis’s fiduciary duties.
Today, a US bankruptcy court gave Davis two weeks to respond to a summons served in January 2023. The subpoena seeks, among other things, the hedge fund’s financial records.
Despite Do Kwon’s Promises, TerraUSD Holders Still Waiting for Funds
Following the collapse of the TerraUSD stablecoin in May 2022, Do Kwon, co-founder of TerraUSD issuer TerraForm Labs, promised the community that he would work together to make holders whole.
Like Davis and Zhu, who remained active on Twitter following the 3AC collapse, Kwon primarily used the platform to discuss new developments on Terra rather than cater to TerraUSD holders as a whole.
His last tweet on the matter came on November 16, 2022, where he described an audit of Luna Foundation guards that tried to keep the value of terraUSD at $1.
LFG tweeted on October 7, 2022 that it could not offer a timeline for investors in TerraUSD and its sister coin LUNA.
Quan is currently in Montenegro, where he is facing passport fraud charges. Both the US and South Korea have requested the founder’s extradition. Unlike Sam Bankman-Fried, who last year agreed to voluntary deportation from the Bahamas, Cone must face trial for his crime in Montenegro before prosecutors can consider execution.
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