Sam Bankman-Fried, who has long denied stealing from customers of his FTX cryptocurrency exchange, said prosecutors charged him with “troubling” haste and asked a US judge to throw out 10 of the 13 criminal counts against him.
In a filing in Manhattan federal court Monday, Bankman-Fried’s lawyers said now-bankrupt FTX was removed from the one cryptocurrency company to collapse during a broad market crash in 2022, and that prosecutors unexpectedly charged their client in a “rush to judgment.”
“Somewhat than wait for traditional civil and regulatory processes following their odd course to handle the situation, the Government jumped in with each feet, improperly in search of to show these civil and regulatory issues into federal crimes,” his lawyers wrote.
Bankman-Fried, a 31-year-old former billionaire, rode a boom in Bitcoin and other digital assets to build up an estimated net price of $26 billion and have become an influential political and philanthropic donor before FTX declared bankruptcy in November.
He has pleaded not guilty to fraud and conspiracy.
The exchange imploded after a flurry of customer withdrawals within the wake of reports it had commingled assets with Alameda Research, Bankman-Fried’s crypto-focused hedge fund.
Federal prosecutors in Manhattan said Bankman-Fried misled FTX investors and lenders and stole billions of dollars in customer funds to plug losses at Alameda, buy real estate, and make political contributions through an illegal straw-donor scheme. They’ve also charged him with bribing Chinese officials.
Ahead of a scheduled Oct. 2 trial, his lawyers asked US District Judge Lewis Kaplan to order prosecutors to show over any documents in FTX’s possession that might help the defense, arguing prosecutors were only asking the corporate for information that helps its case.
“The FTX Debtors have worked so extensively with the Government, and are so enmeshed within the investigation, evaluation, and strategy of the Government’s case, that they need to be considered a part of the ‘prosecution team’,” his lawyers wrote.
Representatives of FTX’s current leadership didn’t immediately reply to a request for comment. A spokesman for the US Attorney’s office in Manhattan declined to comment.
Prosecutors have until May 29 to reply to Bankman-Fried’s dismissal request, and Kaplan will hear arguments on June 15.
Extradition
Bankman-Fried has acknowledged that FTX had inadequate risk management but denies stealing funds, and has sought to distance himself from FTX’s day-to-day operations.
Three onetime close associates – former Alameda co-chief executive Caroline Ellison, former FTX technology chief Gary Wang, and former FTX engineering chief Nishad Singh – have all pleaded guilty and agreed to cooperate with prosecutors.
In pleading guilty, Singh admitted to creating political donations in his own name that were funded partly by transfers from Alameda.
But Bankman-Fried’s lawyers said on Monday that the donations made by Singh, known as CC-1 in prosecutors’ charging documents against their client, didn’t actually violate election laws.
“The campaign finance allegations reveal, yet again, the results of the Government’s rush to indict Mr. Bankman-Fried,” his lawyers wrote.
Bankman-Fried has largely been confined to his parent’s home since his December arrest within the Bahamas, where he had lived and where FTX was based. He was extradited to the USA just over every week after his arrest.
His parents, who live in Palo Alto, Calif., are Stanford University law professors and co-signed his $250 million bond.
Of their court papers on Monday, his lawyers said the campaign finance charge must be dismissed since it was not included on the give up warrant signed by the Bahamas’ foreign affairs minister ahead of Bankman-Fried’s extradition, and that other charges including the bribery accusation were improperly brought after he was extradited.
