Sam Bankman-Fried pleads not guilty in sprawling crypto fraud case

Accused cryptocurrency fraudster Sam Bankman-Fried pleaded not guilty at his arraignment in Manhattan court Tuesday — and was ordered to steer clear of his  FTX exchange because of recent suspicious activity.

The 30-year-old fallen wunderkind had to agree to the move if he wanted to stay free on bond until his case is heard in court, said federal Judge Lewis Kaplan, who set a tentative trial date of Oct. 2.

Federal prosecutors told Kaplan they were seeking the restriction because of potential red flags involving some virtual wallets on the exchange that had been accessed since Bankman-Fried’s arrest — including cryptocurrency being moved around — and they need time to investigate. 

“While we don’t know whether it was the defendant who made these transfers, he did at one point have access to these wallets,” Assistant US Attorney Danielle Sassoon said in court. 

The suspect’s lawyers contended that their client is not the one moving the crypto around and claimed they notified the government of the situation — an assertion of innocence that the suspect previously echoed himself in a tweet.

“None of these are me. I’m not and couldn’t be moving any of those funds; I don’t have access to them anymore,” Bankman-Fried wrote on Twitter on Dec. 30, after suspicions about the accounts first surfaced.

The alleged fraudster linked to an article from Cointelegraph in the tweet​,​ which reported that crypto wallets associated with Bankman-Fried’s hedge fund were transferring assets out. 

“I believe it is likely the case that various legit legs of FTX have the ability to access these funds; hopefully that’s what’s happening here​,” the suspect wrote in a subsequent tweet. “If not, hopefully one steps in soon to do so.  I would be happy to help advise regulators on this if any wanted​.”​

Tuesday was Bankman-Fried’s second appearance in Manhattan federal court since his extradition from the Bahamas. 

The alleged crypto crook is accused in an eight-count indictment of swindling investors and customers of his popular currency exchange, FTX, by diverting cash invested in the platform to his hedge fund Alameda Research and for lavish personal expenses. 

The indictment also charges Bankman-Fried with conspiracy to violate campaign finance laws and conspiracy to commit money laundering as part of his alleged sprawling fraud operation.

The suspect could face up to 115 years behind bars if convicted of all charges, the feds said.

The shaggy-haired accused scammer was met by a sizable media scrum when he arrived at court with his legal team — and mother — at about 12:40 p.m.

Bankman-Fried, wearing a dark-colored suit and his backpack, followed security guards who pushed through the gaggle of photographers in front of the courthouse entrance on Worth Street in lower Manhattan.

His lawyer entered his not-guilty plea in court.

About 15 minutes before the start of Bankman-Fried’s arraignment, US Attorney Damian Williams announced that his office has created a special “FTX Task Force” to deal with “matters related to the FTX collapse” — including trying to recover victims’ swindled assets.

“The Southern District of New York is working around the clock to respond to the implosion of FTX. It is an all-hands-on-deck moment,” Williams said in a statement.

“We are launching the SDNY FTX Task Force to ensure that this urgent work continues, powered by all of SDNY’s resources and expertise, until justice is done.”

After the suspect’s indictment on Dec. 13, federal prosecutors revealed that two of Bankman-Fried’s co-conspirators had pleaded guilty to fraud charges for their roles in the scheme and agreed to cooperate with federal investigators who are probing the crypto operation. 

His ex-girlfriend, former Alameda CEO Caroline Ellison, 28, and FTX co-founder Gary Wang, 29, each copped to a number of fraud and conspiracy charges in secret court hearings days after Bankman-Fried was charged. 

The alleged fraudster has been living at his parents’ California house since his release on bail. 

After court Tuesday, he headed to his lawyers’ Manhattan offices at 800 Third Ave., photos show.