Sam Bankman-Fried, in First Detailed Defense, Seeks to Dismiss Charges

Sam Bankman-Fried, the founding father of the collapsed cryptocurrency alternate FTX, has issued his first detailed authorized protection since prosecutors accused him of fraud, searching for to dismiss a number of of the fees and claiming that the high-powered regulation agency representing FTX in its chapter has been doing the federal government’s bidding.

In court docket filings late Monday, attorneys for Mr. Bankman-Fried stated FTX and its attorneys on the agency Sullivan & Cromwell had grow to be de facto brokers of federal prosecutors constructing the legal case towards him and is perhaps withholding essential proof.

“FTX’s authorized advisors went to the federal government to accuse Mr. Bankman-Fried behind his again with out figuring out the complete details, and in the end compelled him to step down as CEO,” the attorneys wrote.

For months, Sullivan & Cromwell has funneled paperwork and different proof to the prosecution, the filings say. Mr. Bankman-Fried’s attorneys claimed that prosecutors had been searching for solely essentially the most incriminating paperwork, regardless that FTX may additionally be sitting on materials that might assist the protection.

In impact, they argued, prosecutors have been “outsourcing” the authorized requirement to present doubtlessly useful materials to the protection staff, shifting that accountability to a “personal occasion” with no obligation to Mr. Bankman-Fried.

Representatives for FTX, Sullivan & Cromwell and the US Attorney’s Office in Manhattan didn’t instantly reply to requests for remark.

Federal prosecutors have charged Mr. Bankman-Fried with orchestrating an enormous fraud that misappropriated billions of {dollars} in buyer cash from FTX. The authorities have additionally charged him with cash laundering, bribing the Chinese authorities and overseeing an unlawful marketing campaign finance scheme that showered tens of hundreds of thousands of {dollars} on Democratic and Republican candidates.

Mr. Bankman-Fried, 31, has pleaded not responsible to these prices. His attorneys on the New York agency Cohen & Gresser have stated they’re ready to go to trial in federal court docket in Manhattan as quickly as October.

Mr. Bankman-Fried was launched on bail in December however confined to his dad and mom’ house in Palo Alto, Calif. He faces an uphill authorized battle. Three of his prime colleagues have pleaded responsible and are cooperating with prosecutors. If convicted, he might spend a long time in a federal jail.

The motions filed on Monday are almost definitely the primary of many makes an attempt by Mr. Bankman-Fried’s authorized staff both to search the manufacturing of extra paperwork from prosecutors or to persuade Judge Lewis A. Kaplan of Federal District Court in Manhattan to dismiss a number of the 13 counts towards him.

In all, Mr. Bankman-Fried is searching for to dismiss 10 of the fees. The filings argue that 4 of the counts — together with the overseas bribery cost, the marketing campaign finance cost and a financial institution fraud cost — violated parts of the extradition course of between the United States and the Bahamas, the place Mr. Bankman-Fried was arrested. In extradition instances, prosecutors are often restricted in bringing new prices after a defendant has been transferred.

The protection attorneys argued that one other six of the fees needs to be dismissed for being too imprecise or having different authorized flaws. They stated the prosecutors had displayed an “eagerness to run up prices towards Mr. Bankman-Fried.”

Much of the protection’s early technique additionally focuses on the position of Sullivan & Cromwell in the case. Mr. Bankman-Fried had employed attorneys from the agency to assist with a variety of authorized duties earlier than FTX collapsed. When the alternate imploded, Sullivan & Cromwell’s attorneys took management, naming a veteran restructuring knowledgeable, John Jay Ray III, to exchange Mr. Bankman-Fried. One of Mr. Ray’s first acts was to situation a scathing report that stated FTX beneath Mr. Bankman-Fried had lacked inside controls.

But in January, the US trustee in the chapter case raised objections to the regulation agency’s illustration of FTX, arguing that it had not totally disclosed the extent of its earlier authorized work for the alternate. One of FTX’s former inside attorneys claimed in a court docket submitting that Sullivan & Cromwell’s earlier work created main conflicts of curiosity.

A decide in the end dominated that the agency might proceed to oversee the chapter.

In the court docket filings on Monday, Mr. Bankman-Fried portrays Mr. Ray, FTX and the attorneys at Sullivan & Cromwell as all working towards him, with the blessing of the federal government.

Mr. Ray, FTX and the attorneys “have acted as a public mouthpiece for the federal government” and “have assumed the position of prosecutor by publicly labeling” Mr. Bankman-Fried as “’the villain,’” the filings say.

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