Bankman-Fried’s Lawsuit: It’s Hard To Charge More New Crimes

Key Points:

• Bankman-Fried’s attorneys contend that accusations imposed by the US Department of Justice after his extradition may violate the US-Bahamas pact.
• They claim that a recent Supreme Court decision proves he did not commit fraud.
• The United States Supreme Court has supported the defense case.

Fraud proceedings against FTX co-founder Sam Bankman-Fried might be extended by “months or years” if further allegations are filed, possibly pushing the trial date beyond October, his attorneys claimed in judicial files on Monday.

His attorneys contend that any charges added by the US Department of Justice after his extradition may violate the US-Bahamas treaty and that he has the right to challenge any effort to add them in foreign courts.

“Mr. Bankman-Fried is currently challenging the Government’s new application for consent in The Bahamas, as is his right, and such proceedings may well take many months, even years to be litigated,” the filing said.

This and other case law undercut charges that Bankman-Fried misled a bank and people who lent money to his hedge fund Alameda Research, who might, in theory, still receive their money back when the business is wound up, according to his attorneys.

Sam Bankman-Fried is setting the framework for a defense that claims he took many of the steps for which he is now facing fraud charges on the advice of a major Silicon Valley legal firm.

Bankman-Fried’s attorneys previously requested that the judge hearing his criminal case order prosecutors to turn over papers provided to the government by the former FTX legal firm Fenwick & West. If the government does not agree, Bankman-Fried wishes to subpoena the Mountain View, California-based company.

According to the defense, this counsel covered the use of encrypted messaging applications, the supply of multimillion-dollar loans to FTX executives, and the cryptocurrency exchange’s compliance with US banking standards. All of these are important allegations against Bankman-Fried, who is suspected of planning and concealing a multi-year scam in which he utilized FTX client cash for hazardous investments, personal spending, and political contributions.

The defense position has been bolstered by the United States Supreme Court, which restricted the reach of federal fraud statutes in a May decision involving state contract bidding.

Bankman-Fried is now out on bail after being arrested in December and extradited from the Bahamas after the collapse of his cryptocurrency enterprise, which declared bankruptcy in November. He has pled not guilty to wire fraud and money laundering accusations.

As Coincu reported, during a two-day hearing, Judge John Dorsey rejected arguments from attorneys representing multiple media sites and the U.S. bankruptcy trustee, who acts as a government watchdog in Chapter 11 reorganization proceedings, opposing FTX’s desire to keep customer and creditor identities private.

Find out more information about Sam Bankman-fired at Coincu.

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Harold

Coincu News