Bankman-Fried loses bid to toss legal fees over FTX's collapse

By Luc Cohen

NEW YORK (Reuters) -A federal decide on Tuesday rejected Sam Bankman-Fried’s bid to throw out many of the U.S. authorities’s legal case accusing the FTX cryptocurrency change founding father of orchestrating a multibillion-dollar fraud.

The choice by U.S. District Choose Lewis Kaplan in Manhattan paves the way in which for an Oct. 2 trial of Bankman-Fried, a 31-year-old former billionaire.

Prosecutors accused Bankman-Fried of stealing billions of {dollars} in FTX buyer funds to plug losses at his Alameda Analysis hedge fund.

In addition they accused Bankman-Fried of deceptive buyers and lenders, and contributing illegally to U.S. political campaigns within the names of colleagues.

Bankman-Fried has pleaded not responsible and denied stealing funds, whereas acknowledging that FTX had insufficient threat administration.

Bankman-Fried in Could requested Kaplan to dismiss not less than 11 of the 13 fraud and conspiracy fees he confronted.

Bankman-Fried stated some fees relied on a fraud idea — the place a defendant could possibly be convicted for depriving somebody of economically priceless data and never simply tangible property — the U.S. Supreme Courtroom final month deemed invalid.

However the decide agreed with prosecutors that the idea, referred to as proper to regulate, didn’t apply to Bankman-Fried.

“The defendant’s assertion that the indictment doesn’t allege any ‘financial loss’ to FTX prospects seems to be factually incorrect,” and the alleged misappropriated funds clearly constituted property, Kaplan wrote.

A spokesman for Bankman-Fried declined to remark.

Bankman-Fried additionally argued that some fees have been improperly introduced with out consent from the Bahamas, the place he was arrested in December and extradited to the USA.

An extradition treaty between the USA and the Bahamas, the place FTX was based mostly, says a rustic should consent earlier than defendants will be tried on fees introduced after their extradition.

Kaplan this month stated a second trial might be held March 11 on the 5 fees prosecutors introduced towards Bankman-Fried after his extradition.

Prosecutors stated they requested the Bahamas to comply with these fees, which embrace conspiracy to bribe Chinese language officers and commit financial institution fraud, however didn’t know when the Caribbean nation would grant its consent.