Sam Bankman-Fried contends that the FTX exchange’s bankruptcy should not be considered relevant in the lead-up to his October fraud trial. The U.S. Department of Justice, in a filing on Friday night, argued that FTX advertisements featuring comedian Larry David and American football player Tom Brady demonstrate a blurring of lines between the financially troubled crypto exchange’s U.S. and global operations.
Sam Bankman-Fried, the founder and former CEO of FTX, is currently disputing the types of evidence the government can present in support of various charges, including wire fraud. He has accused the DOJ of introducing corruption and campaign finance allegations indirectly. Bankman-Fried has pleaded not guilty, and the trial is scheduled to commence on October 2.
Bankman-Fried’s legal team contends that the legally separated U.S. operations should be treated separately, as the accusations pertain primarily to the international business. However, the government argues that the distinction is not so clear-cut, citing a series of widely known ads that aired shortly before a significant cryptocurrency market crash that ultimately led to Bankman-Fried’s company’s downfall. The DOJ filing references these ads, which featured celebrities and portrayed “FTX” as a “safe and easy way to get into crypto” without distinguishing between the international platform and FTX.US.
Furthermore, the DOJ is interested in delving into the intricate details surrounding FTX’s collapse, asserting that they are closely tied to the alleged misappropriation of customer funds. While Bankman-Fried has asserted that he was pressured into relinquishing control of a company that had the potential to recover financially, the government maintains that the circumstances surrounding the bankruptcy are of relevance to the jury, even if the eventual fate of FTX is not. According to the DOJ, “whether customers could be made whole in the future ‘is immaterial as a matter of law.'”
The government also argues that testimony will demonstrate that FTX co-founder Gary Wang aided Bankman-Fried in moving assets to the Bahamas on November 11, actions that were “clearly part of the alleged wire fraud scheme.”
FTX CEO and Extradition
Bankman-Fried’s legal team has accused the government of effectively bypassing the terms of his extradition from the Bahamas, where he managed the company’s operations. Recently, the Department of Justice (DOJ) withdrew charges related to campaign finance laws and the alleged bribery of Chinese officials because they were not included in the original extradition request to bring him to the United States.
By introducing evidence related to these withdrawn charges, the government is attempting to reverse its previous narrowing of the case and essentially prosecute Mr. Bankman-Fried on counts that had been separated and removed,” according to Bankman-Fried’s legal submission. “The only discernible consequence of admitting evidence regarding the alleged bribery would be the potential improper influence on the jury, leading them to believe that Mr. Bankman-Fried had a propensity for criminal behavior.”
Bankman-Fried was apprehended in December and, last month, was found to have violated his bail conditions by contacting witnesses and disclosing potential evidence to the New York Times. His legal representatives have protested that the conditions of his incarceration are hindering their ability to adequately prepare his defense.