NEW YORK – Sam Bankman-Fried, the founder of collapsed cryptocurrency exchange FTX, has issued his first detailed legal defence since prosecutors accused him of fraud, seeking to dismiss several of the charges and claiming that the high-powered law firm representing FTX in its bankruptcy has been doing the United States government’s bidding.
In court filings late on Monday, lawyers for Bankman-Fried said FTX and its lawyers at the firm Sullivan & Cromwell had become de facto agents of federal prosecutors building the criminal case against him and might be withholding crucial evidence.
“FTX’s legal advisors went to the government to accuse Mr. Bankman-Fried behind his back without knowing the full facts, and ultimately forced him to step down as chief executive,” the lawyers wrote.
For months, Sullivan & Cromwell has funneled documents and other evidence to the prosecution, the filings say. Bankman-Fried’s lawyers claimed that prosecutors had been seeking only the most incriminating documents, even though FTX might also be sitting on material that could help the defence.
In effect, they argued, prosecutors have been “outsourcing” the legal requirement to provide potentially helpful material to the defence team, shifting that responsibility to a “private party” with no obligation to Bankman-Fried.
Federal prosecutors have charged Bankman-Fried with orchestrating a vast fraud that misappropriated billions of dollars in customer money from FTX. The authorities have also charged him with money laundering, bribing the Chinese government and overseeing an illegal campaign finance scheme that showered tens of millions of dollars on Democratic and Republican candidates.
Bankman-Fried, 31, has pleaded not guilty to those charges. His lawyers at the New York firm Cohen & Gresser have said they are prepared to go to trial in federal court in Manhattan as soon as October.
Bankman-Fried was released on bail in Dec 2022 but confined to his parents’ home in Palo Alto, California. He faces an uphill legal battle. Three of his top colleagues have pleaded guilty and are cooperating with prosecutors. If convicted, he could spend decades in a federal prison.
The motions filed on Monday are most likely the first of many attempts by Bankman-Fried’s legal team, either to seek the production of more documents from prosecutors or to persuade Judge Lewis A. Kaplan to dismiss some of the 13 counts against him.
In all, Bankman-Fried is seeking to dismiss 10 of the charges. The filings argue that four of the counts – including the foreign bribery charge, the campaign finance charge and a bank fraud charge – violated elements of the extradition process between the US and the Bahamas, where Bankman-Fried was arrested. In extradition cases, prosecutors are usually limited in bringing new charges after a defendant has been transferred.
The defence lawyers argued that another six of the charges should be dismissed for being too vague or having other legal flaws. NYTIMES
