Sam Bankman-Fried Wants All Charges Dropped–Except For Fraud And Money Laundering

FTX founder Sam Bankman-Fried petitioned to a federal judge in New York on Monday to dismiss all criminal charges brought against him by federal prosecutors following the abrupt closure of his cryptocurrency exchange last year.

Bankman-Fried’s lawyers contended in various documents with the federal court for the Southern District of New York that the federal government’s actions against him were “dramatic” and converted “civil and regulatory issues into federal crimes.”

“Rather than wait for traditional civil and regulatory processes following their ordinary course to address the situation, the government jumped in with both feet, improperly seeking to turn these civil and regulatory issues into federal crimes,” his lawyers wrote.

The defense claims that the collapse of FTX was caused by the so-called “crypto winter” of 2022, in which the prices of several major cryptocurrencies plummeted while others completely disappeared.

His lawyers said in court papers on Monday that the campaign finance charge should be dismissed because it was not included on the surrender warrant signed by the Bahamas’ foreign affairs minister prior to Bankman-Fried’s extradition, and that other charges, including the bribery accusation, were brought improperly after he was extradited.

According to one of the files, the initial federal indictment had “vague and non-specific charges,” and that additional counts added subsequently violated the extradition agreement between the United States and the Bahamas, where Bankman-Fried was arrested.

The FTX founder’s defense team is requesting that 10 of the 13 allegations against him be dropped.

What is he not contesting?

Bankman-Fried, however, did not ask three charges to be dropped: conspiracy to commit commodities fraud, conspiracy to commit securities fraud, and conspiracy to commit money laundering.

Nevertheless, the former FTX chief has already pled not guilty to all the charges, setting a contentious legal battle between him and his three other firmrunners Alameda CEO Caroline Ellison, former FTX CTO Zixiao (Gary) Wang, and Nishad Singh, the company’s former director of engineering. The three have already pled guilty to charges of fraud and have been working with authorities to make their case against Bankman-Fried.

Bankman-Fried, a 31-year-old former billionaire, has been confined mostly to his parents’ house since his arrest in the Bahamas in December, where he had lived and where FTX was based. Just over a week after his arrest, he was extradited to the United States.

FTX crumbled following reports that it had commingled assets with Alameda Research, Bankman-Fried’s cryptocurrency-focused hedge fund.

Bankman-Fried, according to federal prosecutors in Manhattan, looted billions of dollars in FTX client cash to cover Alameda losses, buy real estate, and make political payments through an unlawful straw-donor scam. He has also been charged with bribing Chinese officials.

Bankman-Fried may only be tried and punished for the accusations he faced at the time of his extradition under an extradition treaty between the United States and the Bahamas, unless the Bahamas government consents to the new charges.

Prosecutors have until May 29 to respond to Bankman-Fried’s dismissal request, and arguments will be heard on June 15 before US District Judge Lewis Kaplan.

According to Forbes magazine, Bankman-Fried amassed a net worth of $26.5 billion by riding the rise of bitcoin and other digital assets. He became a significant donor to political and humanitarian activities in the United States until his fortune was largely depleted when FTX collapsed in November.

Information for this briefing was found via Forbes, CNA, and the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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