Sam Bankman-Fried’s legal team had argued that FTX, the cryptocurrency exchange he formerly headed, was not based in the United States. They contended that since Bankman-Fried had complied with regulatory requirements for FTX US, any charges related to FTX international should not apply.
However, on October 4th, the United States Department of Justice (DOJ) responded with a motion in court, asserting that the absence of cryptocurrency regulations in the U.S. does not preclude the criminal charges against Sam Bankman-Fried, the former CEO of FTX.
This DOJ filing came in response to Bankman-Fried’s request for clarification and reconsideration of charges related to the alleged misappropriation of funds at FTX. His legal team had argued that he was innocent because FTX was not subject to U.S. regulation, and he had followed the applicable rules for FTX US.
The DOJ deemed this argument irrelevant, contending that while the existence of legislation might be necessary to establish a legal obligation, its absence does not affect whether victims entrusted their money to the defendant. The DOJ emphasized that Bankman-Fried’s claim about the lack of regulations pertaining to the use of customer funds was untrue, as there are already regulations in place against such activities.
Furthermore, the DOJ argued that existing laws prohibit companies from embezzling customer assets, and the defendant had been charged accordingly. Additionally, Bankman-Fried was accused of making substantial misrepresentations to customers and misappropriating their funds.
The DOJ insisted that whether the defendant had made significant misstatements or omissions was irrelevant, even in the supposed absence of clearly applicable laws or regulations. It argued that the wire fraud allegations could be substantiated, regardless of the presence or absence of regulation.
Sam Bankman-Fried is currently facing multiple charges, including wire fraud and misappropriation of customer funds, among others. He is presently incarcerated for violating his bail conditions and attempting to influence potential witnesses. Bankman-Fried has sought release on bail before the trial through several appeals, citing issues such as a lack of internet access hindering his defense preparations and the unavailability of vegan meals. However, these requests have been denied.
Bankman-Fried commenced his jury trial on October 3rd, and reports suggest that the trial may extend for up to six weeks.
