Prosecutors Oppose Bypassing Bankman-Fried’s Criminal Charges Easily
- Prosecutors asked a Manhattan federal court judge to reject FTX founder Sam Bankman-Fried’s motion to dismiss criminal charges.
- Bankman-Fried has pled not guilty to 13 charges, including fraud, conspiracy, illicit political donations, and foreign bribery.
- US authorities argued the indictments should stand since the effect of FTX’s trading was felt in US crypto marketplaces.
On Monday, prosecutors asked a Manhattan federal court judge to reject FTX founder Sam Bankman-Fried‘s motion to dismiss criminal charges accusing him of stealing billions of dollars from clients to patch losses at his hedge fund.
Bankman-Fried filed preliminary motions in early May to dismiss most of the accusations brought against him by US prosecutors, alleging procedural difficulties, the inapplicability of several US statutes given FTX’s non-US location, and that the charges exceeded the agreed-upon extradition parameters. The submissions did not seek to quash the accusations of securities fraud and money laundering. SBF’s attorneys had urged the court to dismiss ten of the thirteen counts against him.
Disgraced SBF, the creator of FTX, has pleaded not guilty to accusations that he defrauded investors and stole client deposits on his cryptocurrency exchange to finance costly real estate purchases, political donations, and hazardous trades at Alameda Research, his cryptocurrency hedge fund trading company. According to US Attorney Damian Williams, it is one of the largest scams in US history.
Prosecutors argued in a roughly 100-page document that Bankman-Fried attorneys’ motions are without merit.
“The charges track the relevant statutes and the defendant’s alleged misconduct falls within the heartland of what these statutes prohibit,” according to the filing.
Previously, Bankman-Fried’s attorneys contended that the initial indictment’s eight counts were too vague and non-specific to continue to trial, and that new accusations were blocked under an ExtraditionTreaty between the United States and the Bahamas that precluded charges not authorized at the time of extradition. Prosecutors, on the other hand, have requested Judge Lewis A. Kaplan to allow all charges to continue. They said that the allegations against the initial accusations were legally adequate and that approval from the Bahamas is being sought to allow the additional charges.
One of these allegations, filed in March, claimed that the former CEO violated the Foreign Corrupt Practices Act (FCPA) by offering $40 million to unidentified Chinese officials in order to persuade them to unfreeze accounts.
Although Bankman-Fried contended that claims of commodities fraud were unlawful since they included extraterritorial enforcement, US prosecutors stated the accusations should remain because the effect of FTX’s transactions was seen in US crypto marketplaces.
Bankman-Fried admitted that risk management of FTX was inadequate, but he denied stealing cash. He has attempted to dissociate himself from the failure of his crypto-focused hedge fund, Alameda. Caroline Ellison, the company’s former CEO, has pled guilty and promised to assist authorities.
The “right to control” approach is based on depriving a victim of economically valuable knowledge rather than physical property.
When it reversed a bid-rigging conviction of a Buffalo, New York, construction executive earlier this month, the Supreme Court termed the notion “inconsistent” with how federal fraud statutes had been established and traditionally enforced.
Law experts say Bankman-Fried has a good chance of having the charges dropped since prosecutors can show concrete money that his clients lost.
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