FTX founder Sam Bankman-Fried has requested a New York decide to dismiss felony prices introduced in opposition to him following the collapse of the cryptocurrency alternate final 12 months.
In a flurry of filings on Monday evening, legal professionals of Bankman-Fried put ahead a lot of defences, arguing that the 31-year-old was impermissibly charged with additional crimes following his extradition from the Bahamas in December, that a number of the allegedly unlawful transactions befell exterior of the US and that marketing campaign contributions he made to political events have been authorized.
US prosecutors final 12 months accused Bankman-Fried of working a “world scheme” to defraud clients and lenders of FTX and affiliated hedge fund Alameda earlier than their collapse in November, when a multibillion-dollar gap was uncovered within the firm’s stability sheet.
Bankman-Fried was initially charged with eight felony counts, together with wire fraud, conspiracy to commit cash laundering and conspiracy to violate marketing campaign finance legal guidelines, earlier than prosecutors added 5 extra counts together with securities fraud and conspiracy to violate anti-bribery legal guidelines by paying $40mn to allegedly influence Chinese officials.
The previous entrepreneur’s defence workforce has argued that the costs are “obscure and non-specific” and introduced in a “traditional rush to judgement . . . lower than a month after FTX’s chapter”.
Bankman-Fried had pleaded not responsible to all the costs in opposition to him. His legal professionals stated he had moved to the Bahamas as a result of the legal guidelines governing cryptocurrencies have been clearer there, whereas within the US, “authorized uncertainty and ambiguity have been widespread”.
“Within the wake of the ‘crypto winter,’ the federal government, in hindsight, might dislike or disapprove of enterprise practices of the cryptocurrency business, FTX, and even Mr Bankman-Fried — however this doesn’t give it license to show them into federal crimes,” the legal professionals’ filings stated.
In an try and “battle these baseless prices and clear his identify”, Bankman-Fried drafted within the assist of a British barrister, James Lewis KC, to attest that the extradition treaty between the US and the Bahamas, whose authorized system relies on English regulation, was violated when prosecutors added additional prices following his arrival on American soil.
Bankman-Fried’s legal professionals additionally complained that John Ray, a veteran of the Enron restructuring who took over as chief executive of the bankrupt FTX, had “acted as a public mouthpiece for the federal government by persevering with to make disparaging remarks” in regards to the defendant.
Ray testified to Congress in December that he had by no means “seen such an utter failure of company controls at each stage of an organisation”.
The manager had been “successfully deputised” by the federal government, Bankman-Fried’s legal professionals claimed, “as federal brokers to evaluation and synthesise the proof for them”. They accused FTX of waiving attorney-client privileges to supply info to prosecutors, whereas refusing to take action on subjects which may assist their shopper compile his defence.
A spokesperson for Ray and FTX debtors didn’t reply to a request for remark.
A trial within the felony case is scheduled for October, although Bankman-Fried’s legal professionals have indicated they could ask for a postponement.
Three of Bankman-Fried’s former colleagues — Caroline Ellison, Gary Wang and Nishad Singh — have already pleaded responsible in connection to prices stemming from the collapse and agreed to co-operate with prosecutors.