Disgraced FTX founder, Sam Bankman-Fried, arrived at a New York City courthouse Thursday as federal prosecutors agreed to drop five of the 13 charges against him.
Bankman-Fried, 31, appeared before the Manhattan Federal Court in his signature style: tousled hair, a blue suit, and a light blue tie. He chose to forego a tie bar so that his decorative tie could float in the wind as he walked stiffly into the downtown courthouse.
He was flanked by two men, who stayed close to him as photographers gathered around the cryptocurrency hedge funder.
His arrival came as prosecutors agreed to drop five charges, including one count of bank fraud and one charge of bribery by a foreign government.
It’s not all a win for Bankman-Fried, however, as prosecutors request Judge Lewis A. Kaplan to schedule a second trial for those charges in 2024.
The founder of FTX has argued that prosecutors should not have filed additional charges against him following his extradition based on the first set of charges related to the collapse of one of the largest crypto exchanges in the world.
However, the delay to 2024 on those five counts is not due to extradition, but prosecutors argued that it was due to procedural necessity, The New York Times reported.
Sam Bankman-Fried, 31, arrived at the Manhattan Federal Court in his signature style: tousled hair, a blue suit, with a light blue tie
Prosecutors agreed to drop five charges, including one charge of bank fraud and one charge of bribery by a foreign government. It’s not all a win for Bankman-Fried, however, as prosecutors request Judge Lewis A. Kaplan to schedule a second trial for those charges in 2024.
Bankman-Fried was in court on Thursday for a previously scheduled hearing in the case, though it’s unclear what the parties are discussing.
Prosecutors responded to documents from early May in which Bankman-Fried’s lawyers insisted that the United States went too far in its case against Bankman-Fried, turning regulatory issues into federal crimes.
“These motions are worthless,” prosecutors wrote in a nearly 100-page file filed in a Manhattan federal court. “The charges follow the relevant statutes and the defendant’s alleged misconduct falls within the core area of what these statutes prohibit.”
Bankman-Fried lives with his parents in Palo Alto, California, after posting a $250 million personal recognition guarantee following his December extradition from the Bahamas.
Bankman-Fried has pleaded not guilty to charges that he defrauded investors and looted customer deposits on FTX to make lavish real estate purchases, donate money to politicians, and conduct high-risk trades at Alameda Research, his cryptocurrency hedge fund trading firm.
U.S. Attorney Damian Williams has called it one of the greatest frauds in U.S. history.
The founder of FTX has argued that prosecutors should not have filed additional charges against him following his extradition. However, the delay to 2024 on those five counts is not due to extradition, but prosecutors argued it was due to procedural necessity
In March, new indictments added to the indictment that Bankman-Fried had violated the anti-bribery provisions of the Foreign Corrupt Practices Act by directing the payment of $40 million in bribes to a Chinese official or officials to release $1 billion in cryptocurrency. which was frozen in early 2021.
In asking for all charges to be dropped, defense attorneys said eight charges in the original indictment were too vague and nonspecific to go to trial and that additional charges were barred by an extradition treaty between the U.S. and the United States. Bahamas which banned charges that had not been approved at the time of extradition.
However, prosecutors asked Judge Lewis A. Kaplan to allow all charges to proceed. They said the claims against the original charges were legally sufficient and permission is being sought from the Bahamas to allow the latest charges.
Prosecutors wrote that they expect Bankman-Fried’s attorneys to argue at trial that their client was not involved in Alameda’s day-to-day operations and was unaware that Alameda had borrowed large amounts from FTX to repay its lenders.
The Defendant’s spending of embezzled money on political donations is evidence of the Defendant’s motive for defrauding FTX’s clients and investors: The Defendant wanted access to capital that he could use in part for political donations that would damage his own image. would polish and improve. his company’s regulatory prospects in the United States,” the prosecutors wrote.
Bankman-Fried lives with his parents in Palo Alto, California, after posting a $250 million personal recognition guarantee following his December extradition from the Bahamas
FTX went bankrupt in November when the global exchange ran out of money after the equivalent of a bank run. A trial is tentatively set for the fall
Bankman-Fried, charged with fraud over the collapse of the bankrupt cryptocurrency exchange, sits near attorneys Christian Everdell and Mark Cohen during his February hearing in a New York City federal court
He spent the money Bankman-Fried raised from his business on many things, including himself, political campaigns, and real estate.
Bankman-Fried sparked an explosion of bitcoin and other digital assets to an estimated $26.5 billion in wealth, according to Forbes magazine, but his fortune largely evaporated when FTX collapsed in November.
He has acknowledged that FTX had inadequate risk management, but denies stealing money, and has attempted to distance himself from FTX’s day-to-day operations.
FTX went bankrupt in November when the global exchange ran out of money after the equivalent of a bank run.
Earlier this month, federal prosecutors collected one of the largest amounts of evidence ever seen in a white-collar fraud case, according to a new report.
The evidence includes more than six million pages of emails, Slack messages and other digital records, as well as the handwritten diary of Bankman-Fried’s lieutenant and sometime girlfriend, Caroline Ellison, The New York Times reported Tuesday.
Ellison also recorded observations about Bankman-Fried in electronic files distributed to lawyers on the case, and at times expressed personal and professional resentment toward the founder of FTX, people familiar with the case told the Times.
The sheer volume of government evidence, which is not part of the public trial record but must be shared with the defense team before trial, underlines the complexity of the case against Bankman-Fried.
He spent the money Bankman-Fried raised from his business on many things, including himself, political campaigns, and real estate.
He gave himself about $1.3 billion through personal loans, the SEC said.
He used the money to buy a luxury estate in the Bahamas and funded political campaigns, mainly for Democrats.