Indicted FTX founder Bankman-Fried urges court to toss charges
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[May 09, 2023] By
Luc Cohen
NEW YORK (Reuters) -Sam Bankman-Fried, who has long denied stealing from
customers of his FTX cryptocurrency exchange, on Monday said prosecutors
charged him with "troubling" haste and asked a U.S. judge to throw out
10 of the 13 criminal counts against him.
In a filing in Manhattan federal court, Bankman-Fried's lawyers said
now-bankrupt FTX was far from the only cryptocurrency company to
collapse during a broad market crash in 2022, and that prosecutors
hastily charged their client in a "rush to judgment."
"Rather than wait for traditional civil and regulatory processes
following their ordinary course to address the situation, the Government
jumped in with both feet, improperly seeking to turn 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 accumulate an estimated net worth of $26
billion, and became 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 in the wake
of reports it had commingled assets with Alameda Research, Bankman-Fried's
crypto-focused hedge fund.
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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 have also charged him with
bribing Chinese officials.
Ahead of a scheduled Oct. 2 trial, his lawyers asked U.S. District Judge
Lewis Kaplan to order prosecutors to turn over any documents in FTX's
possession that could helpful the defense, arguing prosecutors were only
asking the company for information that helps its case.
"The FTX Debtors have worked so extensively with the Government, and are
so enmeshed in the investigation, analysis, and strategy of the
Government's case, that they must be considered part of the 'prosecution
team'," his lawyers wrote.
Representatives of FTX's current leadership did not immediately respond
to a request for comment. A spokesman for the U.S. Attorney's office in
Manhattan declined to comment.
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![](../images/050923PIX/busine42.jpg)
Former FTX Chief Executive Sam Bankman-Fried,
who faces fraud charges over the collapse of the bankrupt
cryptocurrency exchange, walks outside the Manhattan federal court
in New York City, U.S. March 30, 2023. REUTERS/Amanda Perobelli
![](http://archives.lincolndailynews.com/2023/May/09/images/ads/current/atlantabank_lda_SFARM_2023.png)
Prosecutors have until May 29 to respond 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 making political donations in
his own name that were funded in part by transfers from Alameda.
But Bankman-Fried's lawyers said on Monday that the donations made
by Singh, referred to as CC-1 in prosecutors' charging documents
against their client, did not actually violate election laws.
"The campaign finance allegations reveal, yet again, the
consequences of the Government's rush to indict Mr. Bankman-Fried,"
his lawyers wrote.
Bankman-Fried has largely been confined to his parents' home since
his December arrest in the Bahamas, where he had lived and where FTX
was based. He was extradited to the United States just over a week
after his arrest.
His parents, who live in Palo Alto, California, are Stanford
University law professors and co-signed his $250 million bond.
In their court papers on Monday, his lawyers said the campaign
finance charge should be dismissed because it was not included on
the surrender 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.
(Reporting by Luc Cohen in New York; Editing by Simon Cameron-Moore)
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