Indicted FTX founder Sam Bankman-Fried urges court to toss charges

Sam Bankman-Fried, who has lengthy denied stealing from clients of his FTX cryptocurrency change, on Monday mentioned prosecutors charged him with “troubling” haste and requested a U.S. decide to throw out 10 of the 13 legal counts towards him.

In a submitting in Manhattan federal court docket, Bankman-Fried’s legal professionals mentioned now-bankrupt FTX was removed from the one cryptocurrency firm to break down throughout a broad market crash in 2022, and that prosecutors rapidly charged their shopper in a “rush to judgment.”

“Relatively than await conventional civil and regulatory processes following their bizarre course to handle the scenario, the Authorities jumped in with each ft, improperly searching for to show these civil and regulatory points into federal crimes,” his legal professionals wrote.

Bankman-Fried, a 31-year-old former billionaire, rode a growth in bitcoin and different digital property to build up an estimated internet value of $26 billion, and have become an influential political and philanthropic donor before FTX declared chapter in November.

He has pleaded not guilty to fraud and conspiracy.

The change imploded after a flurry of buyer withdrawals within the wake of reviews it had commingled property with Alameda Analysis, Bankman-Fried’s crypto-focused hedge fund.

Federal prosecutors in Manhattan mentioned Bankman-Fried misled FTX buyers and lenders, and stole billions of {dollars} in buyer funds to plug losses at Alameda, purchase actual property, and make political contributions by means of an unlawful straw-donor scheme. They’ve additionally charged him with bribing Chinese officials.

Forward of a scheduled Oct. 2 trial, his legal professionals requested U.S. District Choose Lewis Kaplan to order prosecutors to show over any paperwork in FTX’s possession that would useful the protection, arguing prosecutors had been solely asking the corporate for info that helps its case.

“The FTX Debtors have labored so extensively with the Authorities, and are so enmeshed within the investigation, evaluation, and technique of the Authorities’s case, that they should be thought of a part of the ‘prosecution group’,” his legal professionals wrote.

Representatives of FTX’s present management didn’t instantly reply to a request for remark. A spokesman for the U.S. Lawyer’s workplace in Manhattan declined to remark.

Prosecutors have till Could 29 to answer Bankman-Fried’s dismissal request, and Kaplan will hear arguments on June 15.

Bankman-Fried has acknowledged that FTX had insufficient danger administration but denies stealing funds, and has sought to distance himself from FTX’s day-to-day operations.

Three onetime shut associates — former Alameda co-chief govt Caroline Ellison, former FTX expertise chief Gary Wang, and former FTX engineering chief Nishad Singh — have all pleaded guilty and agreed to cooperate with prosecutors.

In pleading responsible, Singh admitted to creating political donations in his personal title that had been funded partially by transfers from Alameda.

However Bankman-Fried’s legal professionals mentioned on Monday that the donations made by Singh, known as CC-1 in prosecutors’ charging paperwork towards their shopper, didn’t truly violate election legal guidelines.

“The marketing campaign finance allegations reveal, but once more, the implications of the Authorities’s rush to indict Mr. Bankman-Fried,” his legal professionals wrote.

Bankman-Fried has largely been confined to his mother and father’ dwelling since his December arrest within the Bahamas, the place he had lived and where FTX was primarily based. He was extradited to the USA simply over per week after his arrest.

His mother and father, who stay in Palo Alto, California, are Stanford College legislation professors and co-signed his $250 million bond.

Of their court docket papers on Monday, his legal professionals mentioned the marketing campaign finance cost must be dismissed as a result of it was not included on the give up warrant signed by the Bahamas’ overseas affairs minister forward of Bankman-Fried’s extradition, and that different costs together with the bribery accusation had been improperly introduced after he was extradited.