A federal judge on Tuesday rejected Sam Bankman-Fried’s bid to throw outmost of the US government’s criminal case accusing the FTX cryptocurrency exchange founding father of orchestrating a multibillion-dollar fraud.
The choice by US District Judge Lewis Kaplan in Manhattan paves the way in which for an Oct. 2 trial of Bankman-Fried, a 31-year-old former billionaire.
Prosecutors accused Bankman-Fried of stealing billions of dollars in FTX customer funds to plug losses at his Alameda Research hedge fund.
In addition they accused Bankman-Fried of misleading investors and lenders, and contributing illegally to political campaigns within the names of colleagues.
Bankman-Fried has pleaded not guilty and denied stealing funds, while acknowledging that FTX had inadequate risk management.
Bankman-Fried in May asked Kaplan to dismiss a minimum of 11 of the 13 fraud and conspiracy charges he faced.
Bankman-Fried said some charges relied on a fraud theory — where a defendant may very well be convicted for depriving someone of economically beneficial information and never just tangible property — the Supreme Court last month deemed invalid.
However the judge agreed with prosecutors that the speculation, often called right to manage, didn’t apply to Bankman-Fried.
“The defendant’s assertion that the indictment doesn’t allege any ‘economic loss’ to FTX customers appears to be factually incorrect,” and the alleged misappropriated funds clearly constituted property, Kaplan wrote.
A spokesman for Bankman-Fried declined to comment.
Bankman-Fried also argued that some charges were improperly brought without consent from the Bahamas, where he was arrested in December and extradited to the US.
An extradition treaty between the USA and the Bahamas, where FTX was based, says a rustic must consent before defendants may be tried on charges brought after their extradition.
Kaplan this month said a second trial will probably be held March 11 on the five charges prosecutors brought against Bankman-Fried after his extradition.
Prosecutors said they asked the Bahamas to conform to those charges, which include conspiracy to bribe Chinese officials and commit bank fraud, but didn’t know when the Caribbean country would grant its consent.
