FTX founder Sam Bankman-Fried pleaded not guilty to fraud charges related to the collapse of his crypto exchange. (His trial is scheduled to begin Oct. 2.) The back-and-forth Tuesday between his lawyers and federal prosecutors in a Manhattan courtroom suggests he is gearing up for a potentially titanic legal battle.

Here are the highlights of Tuesday’s hearing:

  • Prosecutors asked the presiding judge for a new bail condition that would prevent Mr Bankman-Fried from transferring any funds from FTX or its business affiliate, Alameda Research. (The judge authorized the request.)

  • Mr Bankman-Fried’s lawyers requested that the names of the two other co-signers for his bond, in addition to his parents, remain sealed to protect their privacy. (Also approved.)

  • Prosecutors also pointed to what they said was a growing body of evidence, including documents provided by banks, employees, political campaigns, Internet service providers and new leaders of FTX.

The fallout from the collapse of Sam Bankman-Fried’s FTX empire is still reverberating across the crypto sphere as it faces angry investors and new lawsuits, and executives turn against each other. Cameron Winklevoss, co-founder of crypto exchange Gemini, has blamed Digital Currency Group founder Barry Silbert for the crypto conglomerate. problems of its own customers,

“This mess is entirely of your own making,” Mr. Winklevoss wrote in an open letter published on Twitter. He said 340,000 customers were owed a total of about $900 million. On Gemini Earn, a product that allowed customers to earn up to 8 percent interest on their digital coins by lending them to Genesis Global Capital, a subsidiary of DCG. Origin, which has about $175 million frozen on FTX, froze withdrawals in November following the collapse of FTX, ultimately leaving earning users out of pocket.

Mr. Winklevoss accused Mr. Silbert of borrowing from Gemini customers. “You hide behind lawyers, investment bankers and process,” he wrote, and accused them of “perpetuating malicious tactics.” Mr. Silbert fired back Gemini did not respond to its latest resolution proposal and denied DCG’s claims about its finances.

Late last month, Earnest investors filed a proposed class action in New York federal court, naming Gemini and its founders Cameron and Tyler Winklevoss. The attorneys behind the suit, Hee-Jean Kim and James Cerritella, told DealBook that they regard the Winklevoss letter as an attempt to shift blame for investor losses to Earn, which Gemini has described as risk-free and “crypto.” Marketed as “Savings”. corner.”

Gemini tackles one of crypto’s existential questions: When is a crypto product a security? The lawsuit alleges that Gemini failed to register Earn with the SEC and did not disclose material information to investors. (In previous cases, BlockFi, the bankrupt crypto lender, settled charges after failing to register a similar product with the regulator last year, and the agency blocked a proposed interest offering from crypto exchange Coinbase in 2021.) Was.)

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