Indicted FTX founder Sam Bankman-Fried is urging the court to drop the charges
By Luc Cohen
NEW YORK (Reuters) – Sam Bankman-Fried, who has long denied stealing clients from his cryptocurrency exchange FTX, on Monday asked a US judge to drop a criminal charge against him over the collapse of the now-bankrupt FTX.
In a Manhattan federal court filing, attorneys for Bankman-Fried said many cryptocurrency exchanges collapsed during a broad market crash in 2022 and that prosecutors rushed to indict their client.
“Instead of waiting for traditional civil and regulatory procedures to follow their normal course to address the situation, the government jumped in with both legs and tried to turn these civil and regulatory issues into federal crimes,” his attorneys wrote.
Bankman-Fried, a 31-year-old former billionaire, has been largely confined to his parents’ home since his December arrest in the Bahamas, where he had lived and where FTX was based. A little over a week after his arrest, he was extradited to the United States.
FTX imploded after a spate of client withdrawals amid reports it had mixed assets with Alameda Research, Bankman-Fried’s crypto-focused hedge fund.
Federal prosecutors in Manhattan said Bankman-Fried stole billions of dollars in FTX client funds to offset losses at Alameda, buy real estate and make political contributions through an illegal straw donor program. They have also accused him of bribing Chinese officials.
Prosecutors have until May 29 to respond to Bankman-Fried’s parole motion, and US District Judge Lewis Kaplan will hear arguments on June 15.
According to Forbes magazine, Bankman-Fried has seen a boom in Bitcoin and other digital assets with an estimated net worth of $26.5 billion. His fortune largely disappeared when FTX collapsed in November.
The Massachusetts Institute of Technology graduate has pleaded not guilty to 13 counts of fraud and conspiracy. He has acknowledged that FTX had inadequate risk management, but denies stealing funds and has attempted to distance himself from FTX’s day-to-day operations.
Three former close associates — Caroline Ellison, former Alameda co-CEO, Gary Wang, former FTX chief technology officer, and Nishad Singh, former FTX chief technology officer — have all pleaded guilty and agreed to cooperate with prosecutors.
Bannkman-Fried’s trial is scheduled for October 2.
His parents, who live in Palo Alto, California, are Stanford University law professors and co-signed his $250 million bond.
Bankman-Fried has limited access to technology after prosecutors warned he could be tampering with witnesses.
(Reporting by Luc Cohen in New York; Editing by Simon Cameron-Moore)