Federal prosecutors probing the collapse of the FTX cryptocurrency exchange said late Wednesday that, at least for now, they would drop several charges against the company’s founder, Sam Bankman-Fried,
In a court filing, prosecutors said they would proceed to a trial in October without pursuing five of the 13 charges against Mr Bankman-Fried – a set of charges that the government had tried to cover up in the months after he was extradited. Was added to the indictment of the Mughal. From the Bahamas in December. Among those charges was one count of bank fraud, as well as an allegation that Mr. Bankman-Fried paid bribes to a foreign government.
The withdrawal of those counts was a victory for Mr Bankman-Fried, who has argued that prosecutors should not have been allowed to charge him with additional crimes after his extradition.
But the victory came with a big caveat: Prosecutors have asked the judge overseeing the case, Lewis A. Kaplan to conduct a second trial in early 2024 on five of those cases.
Prosecutors said the delay was a procedural necessity. This week, Mr Bankman-Fried won a ruling in the Bahamas, where FTX was based, giving him the ability to argue in court there that the Bahamian government should not have agreed to the additional charges. That legal dispute could take months to unfold.
In court filings on Wednesday, prosecutors said it was uncertain when the Bahamas would decide whether to authorize the new charges. He wrote that his move was aimed at “simplifying evidence at trial and reducing the burden of trial preparation” on Mr. Bankman-Fried.
Mr Bankman-Fried was arrested in December following the collapse of one of the world’s largest crypto exchanges, FTX. He agreed to be extradited over allegations that he perpetrated a widespread fraud in which he used billions of dollars in customer deposits to finance real estate purchases, charitable donations and crypto trading.
After his arrival in the United States, Mr. Bankman-Fried was granted bail and allowed to remain under house arrest at his childhood home in Palo Alto, California.
In February, the prosecutor filed an amended charge, adding four new charges to the eight in the original document. The new charges included an allegation that Mr Bankman-Fried committed bank fraud and operated an unlicensed money transmitting business.
A month later, prosecutors attacked another chargeMr Bankman-Fried is accused of paying a $40 million bribe to the Chinese government to unfreeze trading accounts maintained by Alameda Research, a hedge fund he owned.
In court filings, Mr Bankman-Fried’s lawyers have called for the new charges to be dropped because they violated elements of the extradition process between the Bahamas and the United States. In such cases, prosecutors are usually limited to bringing new charges after a defendant has been arraigned.
Prosecutor Said Recent filings state that they will not pursue new charges until the government of the Bahamas authorizes them. This week rulingA Bahamian judge paved the way for Mr Bankman-Fried to challenge that authority in court.
Mr. Bankman-Fried also argued Many of the original charges against him had to be dropped, saying they were too vague or had other legal flaws. The initial indictment alleged money laundering, securities fraud and campaign finance violations, among other crimes.
His attorneys are set to appear in federal court on Thursday to make the case that even some of those charges should be dropped.
