FTX founder Sam Bankman-Fried has asked a New York judge to dismiss criminal charges brought against him following the collapse of the cryptocurrency exchange last year.
In a flurry of filings on Monday night, Bankman-Fried’s lawyers put forward a number of defences, arguing that the 31-year-old was impermissibly charged with further crimes following his extradition from the Bahamas in December, that some of the allegedly illegal transactions took place outside of the US and that campaign contributions he made to political parties were legal.
Last year, US prosecutors accused Bankman-Fried of running a “global scheme” to defraud customers and lenders of FTX and affiliated hedge fund Alameda before their collapse in November, when a multibillion-dollar hole was uncovered in the company’s balance sheet.
He was initially charged with eight criminal counts, including wire fraud, conspiracy to commit money laundering and conspiracy to violate campaign finance laws, before prosecutors added five more counts including securities fraud and conspiracy to violate anti-bribery laws by paying $40mn to allegedly influence Chinese officials.
The former entrepreneur’s defence team has argued the charges are “vague and non-specific” and brought in a “classic rush to judgement . . . less than a month after FTX’s bankruptcy”.
Lawyers for Bankman-Fried, who had already pleaded not guilty to all the charges against him, said he had moved to the Bahamas because the laws governing cryptocurrencies were clearer there, while in the US, “legal uncertainty and ambiguity were common”.
“In the wake of the ‘crypto winter,’ the government, in hindsight, may dislike or disapprove of business practices of the cryptocurrency industry, FTX, or even Mr. Bankman-Fried — but this does not give it license to turn them into federal crimes,” the filings said.
In an attempt to “fight these baseless charges and clear his name”, Bankman-Fried drafted in the help of a British barrister, James Lewis KC, to attest that the extradition treaty between the US and the Bahamas, whose legal system is based on English law, was violated when prosecutors added further charges following his arrival on American soil.
Bankman-Fried’s lawyers also complained that John Ray, a veteran of the Enron restructuring who took over as chief executive of the bankrupt FTX, had “acted as a public mouthpiece for the government by continuing to make disparaging remarks” about the defendant.
Ray testified to Congress in December that he had never “seen such an utter failure of corporate controls at every level of an organisation”.
The executive had been “effectively deputised” by the government, Bankman-Fried’s lawyers claimed, “as federal agents to review and synthesise the evidence for them”. They accused FTX of waiving attorney-client privileges to provide information to prosecutors, while refusing to do so on topics that might help their client compile his defence.
A spokesperson for Ray and FTX debtors did not respond to a request for comment.
A trial in the criminal case is scheduled for October, though Bankman-Fried’s lawyers have indicated they may ask for a postponement.
Three of Bankman-Fried’s former colleagues — Caroline Ellison, Gary Wang and Nishad Singh — have already pleaded guilty in connection to charges stemming from the collapse and agreed to co-operate with prosecutors.
