FTX Prosecutors Say Bankman-Fried Case Is Solid

Federal prosecutors want a judge to uphold charges against FTX founder Sam Bankman-Fried.

Bankman-Fried, accused of masterminding a multibillion-dollar fraud scheme at the collapsed cryptocurrency exchange, asked Judge Lewis Kaplan earlier this month to dismiss the case against him.

Now, prosecutors say the arguments in the defendant’s motions don’t hold up, according to court documents filed late Monday (May 29).

“In arguments across several briefs, the defendant moves to dismiss eight of the thirteen charges in the Indictment on the basis that the Indictment’s allegations are insufficient and legally defective,” the filing said.

“These motions are meritless. As discussed below, the charges track the relevant statutes and the defendant’s alleged misconduct falls within the heartland of what these statutes prohibit.”

Attorneys for the 31–year-old Bankman Fried asked the judge to dismiss 10 of the 13 charges against their client on May 8. Bankman-Fried was charged in December with multiple counts of fraud and conspiracy following the multibillion-dollar implosion of FTX.

Secondary indictments earlier this year revealed a host of additional allegations, including bank fraud, campaign finance violations and a bribery scheme in China.

Bankman-Fried has pleaded not guilty to all charges against him and remains free on bail. His trial is due to start October 2.

His lawyers argued that the downturn in the crypto market in 2022 may have biased the government against their client.

“In the wake of the ‘crypto winter,’ the government, in hindsight, may dislike or disapprove of business practices of the cryptocurrency industry, FTX, or even Mr. Bankman-Fried — but this does not give it license to turn them into federal crimes,” one of the filings said.

The filing comes a week after reports suggesting that John Ray III — who replaced Bankman-Fried as CEO of FTX — is working to reboot the company.

As CoinDesk reported last week, billing statements from Ray cite “2.0,” which could refer to “FTX 2.0,” or a new iteration of the exchange.

While there is no direct evidence of official plans to relaunch FTX, both Ray and the company’s lead attorney have said recently that the possibility isn’t off the table.

As PYMNTS wrote in April, Ray is tasked with generating as much value as possible for the bankrupt exchange’s creditors, including determining whether a revival of FTX would create more value than simply selling off the company’s assets.