Lawyers for FTX founder Sam Bankman-Fried faced a skeptical federal judge when they argued he should dismiss criminal fraud charges their clients are facing after his cryptocurrency business collapsed.
NEW YORK — Lawyers for FTX founder Sam Bankman-Fried faced a skeptical federal judge Thursday when they argued that he should get rid of criminal fraud charges their clients are facing after his cryptocurrency business collapsed.
Judge Louis A. Kaplan repeatedly argues that nothing criminal would happen if investors and clients in FTX were tricked into believing their money was being used for one purpose when it had been used for another.
When one of the defense attorneys finished speaking, the judge told him, “I congratulate you on an extraordinary imaginative argument.” He did not rule immediately.
The Manhattan federal court arguments came after the attorney general said the government would proceed with a fall trial only on the original charges filed against Bankman Fried when he was extradited from the Bahamas in December because the new charges added in March did not yet remove a legal hurdle. relating to the US extradition treaty with the Bahamas.
These new charges included an allegation that Bankman-Fried directed $40 million in bribes to a Chinese official or officials to free up $1 billion in cryptocurrency that had been frozen in early 2021.
According to the terms of the treaty, authorities in the Bahamas will have to provide a waiver to prosecutors to move forward with the new charges.
Assistant US Attorney Thein Rhin said prosecutors will not proceed with the new charges unless they obtain a waiver, citing an “interest in monitoring diplomatic relations”. He said discussions with Bahamas authorities prior to the disclosure of the indictment, which was overturned in March, led prosecutors to believe the waiver would be delivered.
He said a trial based on the original indictment would last four to five weeks, about a week less than the new charges listed would be.
Bankman-Fried, 31 – referred to as “SBF” by cryptocurrency enthusiasts – has pleaded not guilty to all charges as he awaits trial at his parents’ home in Palo Alto, California, where the terms of his $250 million personal bond are severely limiting. Online communication and the ability to transfer money. If convicted, he could face years in prison. US Attorney General Damian Williams called it “one of the largest frauds in American history”.
In asking the judge to dismiss the indictment, his attorneys argued that the charges are flawed, saying they are repetitive, vague, ill-defined and the kinds of things that would normally lead to regulatory enforcement action rather than criminal charges.
“They’re trying to incriminate a civil case,” argued attorney Christian Everdale as he tried to poke holes in the various charges facing his client, including a bank fraud conspiracy charge. It was Everdale who prompted the judge to praise his “extraordinarily imaginative argument”.
Prosecutors allege that Bankman-Fried and other executives in his cryptocurrency operation deceived investors and plundered the deposits of FTX clients into making lavish real estate purchases, donating money to politicians and making risky deals at Alameda Research, a cryptocurrency hedge fund trading firm.
FTX entered bankruptcy in November when the global stock exchange ran out of money after the equivalent of running a bank.
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