The latest development in the FTX case involves FTX founder Sam Bankman-Fried requesting that the criminal charges against him be dropped. He claims that prosecutors have wrongly transformed civil and regulatory matters into federal crimes.
Bankman-Fried’s lawyers filed a court document on Monday, arguing that the U.S. government’s response to a general market collapse in the cryptocurrency industry, known as the “crypto winter,” was unwarranted, and it affected every part of the market.
Bankman-Fried’s legal team argued that his non-U.S. FTX company lasted much longer than others in the industry before its bankruptcy in November. The global exchange ran out of money after an equivalent of a bank run. A trial has been scheduled for the fall.
In other court papers filed on Monday, Bankman-Fried’s lawyers requested the dismissal of some parts of the indictment on other grounds, including arguments that some charges were duplicative. They also argued that FTX’s debtors had become an arm of the government, portraying Bankman-Fried as a villain and giving prosecutors so much information that defense attorneys are worried they won’t be able to access documents that could help prove Bankman-Fried’s innocence.
In March, the indictment was updated to include additional charges against Bankman-Fried, alleging that he broke the anti-bribery provisions of the Foreign Corrupt Practices Act by directing the payment of $40 million in bribes to a Chinese officials to free up $1 billion in cryptocurrency that was frozen in early 2021.
According to Bankman-Fried’s lawyers, the first indictment included eight vague and non-specific allegations to which he pled not guilty after being extradited from the Bahamas in December. They alleged that the ensuing accusations breached the extradition treaty between the United States and the Bahamas.
Bankman-Fried is 31 years old and currently living with his parents in Palo Alto, California. He faces house arrest under a $250 million bail agreement, which has considerably limited his capacity to communicate on the internet and transfer money.