Sam Bankman-Fried is scheduled to submit a not-guilty plea on Tuesday to criminal allegations that he defrauded investors and plundered billions of dollars at his now-bankrupt FTX cryptocurrency exchange, as per a source familiar with the matter.

Bankman-Fried is accused of fraudulently using FTX customer deposits to fund his Alameda Research hedge fund, purchase real estate, and make political contributions totaling millions of dollars.

He is set to enter a plea before US District Judge Lewis Kaplan in Manhattan on Tuesday at 2 pm EST (1900 GMT).

It is not uncommon for criminal defendants to enter a not-guilty plea at the outset. Defendants have the option of changing their plea at a later date.

Bankman-Fried has been released on $250 million bond since his extradition from the Bahamas, where he lived and where the exchange took place, last month.

In further detail, he has been subject to electronic surveillance since his release and is compelled to live with his parents, both professors at Stanford Law School in California.

The MIT graduate has been charged with two charges of wire fraud and six counts of conspiracy, including conspiracy to launder money and commit campaign finance violations. If convicted, he may face up to 115 years in prison.

Bankman-Fried admitted to making mistakes while running FTX, but he believes he is not criminally culpable.

The 30-year-old crypto tycoon rode a surge in the value of bitcoin and other digital assets to become a multi-billionaire and a powerful political donor in the United States until FTX went bankrupt in early November following a rush of withdrawals. On November 11, the exchange declared bankruptcy.

The guilty pleas of two of Bankman-Fried's closest acquaintances last month bolstered the prosecution case.

Caroline Ellison, the former CEO of Alameda, and Gary Wang, the former CEO of FTX, pleaded guilty to seven and four criminal offenses, respectively, and agreed to cooperate with authorities.

According to a transcript of her December 19 plea hearing, Ellison told prosecutors that she agreed with Bankman-Fried to conceal from FTX's investors, lenders, and clients that the hedge fund could borrow an unlimited amount from the exchange.