Trial Looms for Former FTX CEO Sam Bankman-Fried as Legal Team Challenges Charges

Sam Bankman-Fried’s legal team has filed a motion seeking the dismissal of the majority of the 13 criminal charges against the former CEO of FTX. According to his lawyers, FTX had successfully withstood the challenges of the “crypto winter,” a period of industry-wide decline that impacted crypto exchanges, banks, lenders, and hedge funds

This suggests, as per the legal team, that the accusations against Bankman-Fried are unwarranted. Despite the challenges faced by many crypto businesses in 2022, FTX managed to stay afloat longer than most of its counterparts that either faced significant difficulties or closed entirely, Bankman-Fried’s lawyers have claimed.

However, they have stated that eventually, FTX also succumbed to the same market forces. In pre-trial legal proceedings, Bankman-Fried’s legal team has requested that all charges against their client be dropped except for conspiracy to commit securities fraud on FTX investors, securities fraud, and conspiracy to commit money laundering.

Lawyers Seek Dismissal of Multiple Charges

Bankman-Fried’s legal team has requested the dismissal of several counts, specifically counts 1-2, 3-4, 7-9, 10, and 12-13. Their argument for dismissal was based on various grounds, including a violation of the rule of specialty, where counts nine, 10, 12, and 13 allegedly involve offenses outside the scope of the charges Bankman-Fried is facing. Other grounds for dismissal include the “failure to state an offense” or “multiplicitous counts.”

The former FTX CEO’s legal team mentioned: “The government’s response was dramatic — and troubling. 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.”

Sam Bankman-Fried was extradited from the Bahamas to the US. His lawyers have pointed out that under the treaty between the two countries, the Bahamas must give consent to any charges filed after extradition. However, Bankman-Fried is now facing four charges that were not part of the original agreement, and the country has not approved the additional charges, according to his legal team.

According to federal prosecutors, Bankman-Fried has been accused of smuggling $8 billion in customer funds from FTX to Alameda Research, his sister trading firm, over several years to finance high-risk market activities and other questionable transactions. The prosecution has until May 29 to respond to Bankman-Fried’s request for dismissal, and the case will be heard before US District Judge Lewis Kaplan on June 15.

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