(NewsNation) — FTX founder Sam Bankman-Fried has been arraigned in New York Tuesday on charges including fraud and money laundering.
Bankman-Fried pled not guilty to the federal charges, which allege he took billions of dollars from FTX customers for his personal use.
Attorney Mitchell Epner told NewsNation that Bankman-Fried doesn’t have a lot of options at this point. While the charges he’s facing don’t carry a life sentence, the number of charges and maximum sentencing guidelines mean he could still effectively wind up serving life.
“But he could get the same sort of sentence that Bernie Madoff got, who was sentenced to 150 years. It really wouldn’t matter if the prosecutors were to offer him a deal where he was looking at 60 or 70 years,” Epner said.
Although cryptocurrency exchanges may operate in a manner similar to banks, they are not subject to the same regulations, insurance requirements and disclosures the government requires of banks. That left investors with no protections to recover lost funds.
After the collapse of FTX, 30-year-old Bankman-Fried fled to the Bahamas.
Bankman-Fried was accused of illegally diverting massive sums of customer money from FTX to make lavish real estate purchases, donate money to politicians and make risky trades at Alameda Research, his cryptocurrency hedge fund trading firm.
Carolyn Ellison, 28, who ran Alameda, and Gary Wang, 29, who co-founded FTX, have pleaded guilty to fraud charges and are cooperating with prosecutors in a bid for leniency. Both are free on bail.
Their pleas were kept secret until Bankman-Fried was in the air after his extradition from the Bahamas, where FTX is based, due to fears that he might flee.
Epner said those pleas, combined with other factors, make the case against Bankman-Fried very strong.
“When the new CEO of the company says that the company under Bankman-Fried was embezzlement pure and simple, and his two closest confidants have both pled guilty and agreed to cooperate against him,” Epner said. “That is the worst possible situation I could imagine.”
The judge has set a tentative trial date for Oct. 2.
The Associated Press contributed to this report.