FTX founder Sam Bankman-Fried requested on Monday that a U.S. judge throw out 10 of the 13 charges against him in connection with allegations he stole from customers of his cryptocurrency exchange.
The three charges he is not contesting are conspiracy to commit commodities fraud, conspiracy to commit securities fraud and conspiracy to commit money laundering, according to a court filing made public.
Bankman-Fried’s lawyers said in a court filing obtained by Reuters that FTX, which is now bankrupt, was only one of several cryptocurrency companies to collapse during a market crash last year, and that prosecutors rushed to judgment and hastily charged their client.
“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.
SAM BANKMAN-FRIED PLEADS NOT GUILTY TO ADDITIONAL FEDERAL CHARGES
The FTX founder capitalized on a rise 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.
The cryptocurrency exchange collapsed after a number of customer withdrawals following reports it had merged assets with Alameda Research, Bankman-Fried’s crypto-focused hedge fund.
Federal prosecutors in Manhattan have accused Bankman-Fried of misleading FTX investors and lenders, and stealing billions of dollars in customer funds to buy real estate, make political contributions through an illegal straw-donor scheme, and to make up for losses at Alameda. He is also charged with bribing Chinese officials.
His lawyers asked U.S. District Judge Lewis Kaplan to order prosecutors to turn over any documents in FTX’s possession that could be helpful to the defense. They claim prosecutors only asked the company for information that aids the prosecution.
“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.
FTX HAS RECOVERED $7.3B IN ASSETS, BANKRUPTCY LAWYER SAYS
Prosecutors have until May 29 to respond to Bankman-Fried’s request for a dismissal. Kaplan will hear arguments on June 15.
Bankman-Fried has acknowledged that FTX had inadequate risk management but maintains that it did not steal funds.
His once 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.
Singh admitted to making political donations in his own name that were partly funded by transfers from Alameda. Bankman-Fried’s lawyers said, however, that Singh’s donations did not 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 on Monday.
Bankman-Fried has largely been confined to his parents’ home in California since he was arrested in the Bahamas, where he lived and operated FTX out of, and extradited to the U.S. in December.
His lawyers argued in the court filing that 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.
They also said other charges, including the bribery accusation, were improperly brought after his extradition.
He has pleaded not guilty to fraud and conspiracy.
Reuters contributed to this report.
Read the full article here