In Sam Bankman-Fried Case, U.S. Withdraws New Expenses

Federal prosecutors investigating the collapse of the FTX cryptocurrency alternate mentioned late Wednesday that, at the very least for now, they might withdraw a number of of the costs going through the corporate’s founder, Sam Bankman-Fried.

In a courtroom submitting, the prosecutors mentioned they might proceed to a trial in October with out pursuing 5 of the 13 prices in opposition to Mr. Bankman-Fried — a set of accusations that the federal government added to the crypto mogul’s indictment within the months after he was extradited from the Bahamas in December. Amongst these prices was a financial institution fraud depend, in addition to an allegation that Mr. Bankman-Fried bribed a overseas authorities.

Mr. Bankman-Fried has argued that prosecutors shouldn’t have been allowed to cost him with further crimes after his extradition. However the withdrawal got here with a significant caveat: The prosecutors requested the choose overseeing the case, Lewis A. Kaplan of Federal District Courtroom in Manhattan, to schedule a second trial in early 2024 on these 5 counts.

The prosecutors mentioned the delay was a procedural necessity. This week, Mr. Bankman-Fried gained a ruling within the Bahamas, the place FTX was based mostly, granting him the flexibility to argue in courtroom there that the Bahamian authorities shouldn’t consent to the extra prices. That authorized dispute might take months to unfold.

Within the courtroom submitting on Wednesday, the prosecutors mentioned it was unsure when the Bahamas would determine whether or not to authorize the brand new prices. They wrote that their transfer was supposed to “simplify the proof at trial and reduce the burden of trial preparation” on Mr. Bankman-Fried.

Mr. Bankman-Fried was arrested in December after the collapse of FTX, one of many largest crypto exchanges on this planet. He agreed to be extradited on prices that he had orchestrated a sweeping fraud through which he used billions of {dollars} in buyer deposits to finance lavish actual property purchases, charitable donations and crypto buying and selling.

After his arrival in america, Mr. Bankman-Fried was granted bail and allowed to stay underneath home arrest at his childhood residence in Palo Alto, Calif.

In February, prosecutors filed a revised indictment, including 4 prices to the eight within the unique doc. The brand new prices included accusations that Mr. Bankman-Fried dedicated financial institution fraud and operated an unlicensed cash transmitting enterprise.

A month later, prosecutors tacked on one other cost, accusing Mr. Bankman-Fried of paying a $40 million bribe to the Chinese language authorities to unfreeze buying and selling accounts maintained by Alameda Analysis, a hedge fund that he owned.

In courtroom filings, Mr. Bankman-Fried’s attorneys have mentioned the brand new prices violated components of the extradition course of between the Bahamas and america. In such circumstances, prosecutors are normally restricted in bringing new prices after a defendant has been transferred.

The prosecutors mentioned in a latest submitting that they might not pursue the brand new prices until the federal government of the Bahamas licensed them. On this week’s ruling, a Bahamian choose paved the best way for Mr. Bankman-Fried to problem that authorization in courtroom.

Mr. Bankman-Fried has additionally argued that a number of of the unique prices in opposition to him must be withdrawn, saying they’re too obscure or produce other authorized flaws. The preliminary indictment charged him with cash laundering, securities fraud and marketing campaign finance violations, amongst different crimes.

His attorneys appeared in federal courtroom on Thursday to press the case that a few of these prices must be dropped, too.

Back to top button