FTX founder Sam Bankman-Fried asked a New York federal judge on Monday night to dismiss most criminal charges brought against him by federal prosecutors following the sudden collapse of his cryptocurrency exchange last year.
FTX founder Sam Bankman-Fried leaves Manhattan Federal Court after his arraignment and bail hearings/
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Key Takeaways
- In multiple filings made with the Southern District of New York federal court, Bankman-Fried’s lawyers argued that the federal government’s actions against him were “dramatic” and turned “civil and regulatory issues into federal crimes.”
- The defense argues that the collapse of FTX was the result of the so-called “crypto winter” of 2022, where the prices of several popular cryptocurrencies nosedived while others outright collapsed.
- One of the filings claim the initial federal indictment had “vague and non-specific charges,” adding that more counts added later contravene the extradition agreement between the U.S. and the Bahamas, where Bankman-Fried was arrested.
- In total, the FTX founder’s defense team is seeking the dismissal of 10 of the 13 charges made against him.
- The filing also takes aim at FTX’s debtors and CEO John Ray—who is overseeing the bankrupt company’s restructuring—alleging that they have been withholding crucial evidence that may be helpful for the defence while complying with the prosecution’s request for “targeted material that the Government believes will be inculpatory.”
Crucial Quote
The filing alleges that Ray and FTX’s debtors have “acted as a public mouthpiece for the government by continuing to make disparaging remarks about Mr. Bankman-Fried in the FTX bankruptcy proceedings, and have assumed the role of prosecutor by publicly labeling him ‘the villain.’”
Key Background
FTX, which was valued at $32 billion at one point, collapsed rapidly last November after facing a liquidity crisis triggered by a massive selloff of its own FTT tokens. Ray, who took over as CEO after the company filed for bankruptcy, was scathing in his criticism of Bankman-Fried and FTX’s leadership who he called a “very small group of inexperienced, unsophisticated and potentially compromised individuals.”
In December, Bankman-Fried was arrested in the Bahamas, where he resided, and was quickly extradited to the U.S. Federal prosecutors charged the 31-year-old with eight criminal counts including wire fraud, money laundering, and campaign finance law violations with five more counts being added later. Bankman-Fried has pled not guilty to all charges.
