FTX founder Sam Bankman-Fried’s legal battle may be prolonged by “months or years,” according to his counsel, due to potential additional charges and a new Supreme Court judgment that could impact the fraud proceedings against him. In legal filings submitted on Monday, Bankman-Fried’s lawyers expressed concerns that if extra charges were added, the trial scheduled for October might be pushed back. Bankman-Fried, who authorities arrested in December and extradited from the Bahamas after the collapse of his cryptocurrency empire, has pleaded not guilty to charges, including wire fraud and money laundering.
FTX Founder Bankman-Fried’s Defense Challenges Charges and Cites Recent Supreme Court Ruling
Bankman-Fried’s defense team argues that the charges added by the U.S. Department of Justice. After his extradition might violate the treaty between the United States and the Bahamas. They maintain that he has the right to contest the inclusion of these charges in overseas courts. The legal filings stated that Bankman-Fried is currently challenging the new application for consent by the government in the Bahamas, a process that could potentially take a significant amount of time to litigate.
A recent ruling from the U.S. has strengthened the defense’s case. In a May case involving bidding for state contracts, the court narrowed the scope of federal fraud laws. Bankman-Fried’s lawyers argue that this ruling, along with other case law, weakens the allegations of fraud against him in relation to a bank and lenders involved with his hedge fund, Alameda Research. They assert that these parties could potentially recover their money through the winding-up process of the firm.
In the legal document submitted by Bankman-Fried’s lawyers. They asserted that “Bankman-Fried’s actions did not result in the deprivation of the Alameda lenders’ contractual rights to collect the existing loans. The defense also highlighted the assertion that Alameda’s lenders are actively pursuing their rights in the FTX bankruptcy proceedings. Furthermore, the document emphasized that the Supreme Court’s May opinion invalidated charges of misrepresentation. Regarding a bank account set up for Bankman-Fried’s company, North Dimension, stated. “Bank-1’s right to control access to its bank accounts is no longer a valid property right.”
In May, the U.S. government argued that it could seek permission from the Bahamas to add additional charges. It had jurisdiction due to the impact of Bankman-Fried’s actions on U.S. cryptocurrency markets. The case has a scheduled initial hearing on Thursday, where parties anticipate the revelation of further details. As the legal battle progresses, observers eagerly await the outcome of the new Supreme Court judgment to assess its impact. Potential additional charges will shape the trajectory of the proceedings against Sam Bankman-Fried.