The US Department of Justice (DOJ) has decided to move forward with the trial of Sam Bankman-Fried, the former CEO and founder of FTX. However, the trial will only involve the original eight charges filed in December 2022, which include wire fraud, securities fraud, and money laundering.
This decision comes after a court in the Bahamas intervened and prevented the local government from agreeing to additional charges.
Bankman-Fried is facing 13 charges, with five of them added through superseding indictments in February and March 2023. Bankman-Fried’s defense team argued that the Bahamas government must approve these additional specific bribery and campaign finance charges, as the former CEO was arrested in the Bahamas and subsequently extradited to the US last year.
On June 13, a court in the Bahamas ruled against the government’s approval of the additional charges, granting Bankman-Fried’s defense team the opportunity to contest the decision.
US Attorney Damian Williams and his team addressed this development in a letter to Judge Lewis Kaplan of the US District Court for the Southern District of New York, stating that the ongoing legal battle in the Bahamas may continue until near the commencement of Bankman-Fried’s trial in the US.
Among the charges in the latest superseding indictment that will not be pursued in the immediate trial include fraud on FTX customers tied to derivatives, securities fraud against FTX investors, conspiracy to commit bank fraud, conspiracy to operate an unlicensed money transmitter business, and conspiracy to bribe foreign government officials.
DOJ proceeds with trial based on original charges
Considering the uncertainty surrounding the resolution of the Bahamas court proceedings, the DOJ expressed its readiness to proceed with the scheduled trial based on the original charges outlined in the initial indictment.
These charges involve conspiracy to commit wire fraud on FTX customers, wire fraud on FTX customers, conspiracy to commit fraud on FTX customers tied to derivatives, conspiracy to commit securities fraud against FTX investors, conspiracy to commit wire fraud on lenders to Alameda Research, wire fraud on lenders to Alameda Research, conspiracy to commit money laundering, and conspiracy to make unlawful political contributions and defraud the Federal Elections Commission.
The DOJ has requested a trial date for the additional charges in the first quarter of 2024, while Bankman-Fried’s current trial is scheduled for October this year.
Meanwhile, Bankman-Fried’s defense team has filed several motions to dismiss most of the charges on various grounds, prompting the DOJ to challenge their arguments.
The prosecution stated that Bankman-Fried’s attempt to dismiss the charges lacks merit, asserting that the indictment already provides sufficient allegations of false and misleading representations made by the defendant and his co-conspirators to lenders regarding Alameda’s financial condition.
An upcoming hearing is scheduled for Thursday morning for oral arguments on the motions to dismiss, where both sides will present their case.
Court authorizes redaction of customer names by FTX
In a separate development, FTX has been authorized by the court to remove customers’ names from all filings in the bankruptcy case. The decision stems from concerns that disclosing customer names could expose them to scams and identity theft.
This authorization to redact customer names may cause frustration among media outlets seeking access to the list, as there has been a push to obtain it.
