Bankman-Fried fees shouldn’t be tossed, prosecutors say

By Luc Cohen

NEW YORK (Reuters) – Prosecutors urged a Manhattan federal court docket choose on Monday to disclaim a request by FTX founder Sam Bankman-Fried to dismiss prison fees accusing him of stealing billions of {dollars} from clients to plug losses at his hedge fund.

Bankman-Fried, the 31-year-old former cryptocurrency billionaire, has pleaded not responsible to 13 counts of fraud, conspiracy, making unlawful marketing campaign contributions and international bribery.

On Could 8, Bankman-Fried urged U.S. District Decide Lewis Kaplan to dismiss many of the counts, saying prosecutors charged him in a “rush to judgment” following a broad crash in 2022 the place a number of outstanding crypto firms went bankrupt, together with his personal Alameda Analysis.

In a submitting late Monday, prosecutors described motions to dismiss the costs as “meritless”, rebutting Bankman-Fried’s argument that the indictment’s allegations had been inadequate and legally faulty.

“The Indictment sufficiently alleges that the defendant and his co-conspirators made false and deceptive representations to lenders regarding Alameda’s monetary situation. No extra specificity is required,” prosecutors wrote.

Kaplan will hear oral arguments on June 15.

Bankman-Fried has stated FTX’s threat administration was subpar, however has denied stealing funds. He has sought to distance himself from the collapse of Alameda, the crypto-focused hedge fund he owned. Its former chief govt, Caroline Ellison, has pleaded responsible and agreed to cooperate with prosecutors.

He has additionally argued that a number of the fraud fees he faces had been based mostly on a idea that the U.S. Supreme Court docket invalidated on Could 11.

The speculation, often called “proper to manage,” facilities round depriving a sufferer of economically-valuable info relatively than tangible property.

The Supreme Court docket referred to as the speculation “inconsistent” with how federal fraud legal guidelines had been written and traditionally utilized, when it overturned a bid-rigging conviction of a Buffalo, New York, development govt, earlier this month.

Authorized consultants have stated Bankman-Fried faces lengthy odds of getting the costs tossed, as a result of prosecutors can level to tangible cash that his clients misplaced.

Bankman-Fried rode a growth in digital foreign money values to a $26 billion internet price, and have become an influential political and philanthropic donor, earlier than FTX sought Chapter 11 safety in November.

Since his December extradition from the Bahamas, Bankman-Fried has largely been below home arrest at his dad and mom’ Palo Alto, California, house on $250 million bond. His trial is scheduled for Oct. 2.