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Lawyers for FTX Founder Sam Bankman-Fried have stated that litigation proceedings against him could be significantly delayed if further charges are added against the founder.
Bankman-Fried’s lawyers have argued that a new Supreme Court judgment shows that the FTX founder has not committed fraud.
A Significant Delay
Bankman-Fried’s lawyers argued about the delay in legal filings that were made on Monday. The disgraced FTX founder remains on bail after being arrested in the Bahamas in December. US authorities filed several criminal charges against Bankman-Fried, following which he was extradited following the collapse of FTX and its associated entities, including Alameda Research. FTX and Alameda Research had filed for bankruptcy in November, with SBF pleading not guilty to charges brought against him, including those of money laundering and wire fraud.
Lawyers representing Bankman-Fried argued in a pretrial motion to dismiss a majority of the charges against him that charges added by the United States Department of Justice after Bankman-Fried’s extradition could breach the treaty between the United States and the Bahamas. They further added that he held the right to contest any attempt to add charges in overseas courts.
“Mr. Bankman-Fried is currently challenging the Government’s new application for consent in The Bahamas, as is his right, and such proceedings may well take many months, even years, to be litigated.”
The US Supreme Court Boosts Defense Case
Sam Bankman-Fried’s case has been significantly emboldened by the United States Supreme Court, which recently narrowed the scope of federal laws during a case involving the bidding of state contracts. The narrowing of the scope of federal laws, along with other case laws, significantly weakens the prosecution’s arguments that Sam Bankman-Fried defrauded banks and users/clients that lend money to the crypto hedge fund Alameda Research. The banks and users in question still stand a chance of receiving their money back as the firm is wound up. Lawyers arguing for SBF stated,
“The Alameda lenders were not deprived of their contractual rights to collect the existing loans” by Bankman-Fried’s actions. We understand that Alameda’s lenders are vigorously asserting their rights in the FTX bankruptcy proceedings.”
According to the document filed, “Bank-1’s right to control access to its bank accounts is no longer a valid property right” after the Supreme Court’s observation in May. According to SBF’s lawyers, this invalidates charges against him, stating that he misrepresented the purpose of a bank account set up for the company North Dimension.
SBF’s Growing Problems
Sam Bankman-Fried has constantly denied any wrongdoing after pleading not guilty to federal charges. In January, he posted an astonishing blog post stating that he did not steal funds or stash away billions. Instead, he blamed Binance CEO Changpeng Zhao, saying that he had orchestrated the liquidity crisis that led to the fall of FTX and its associated entities. Despite his protests, federal prosecutors added further charges to a growing list of indictments, alleging that he paid $40 million to Chinese officials to unfreeze specific accounts.
Sam Bankman-Fried was also sued by FTX and its sister entity Alameda Research, as it looks to recover $240 million related to the Embed acquisition. Other executives sued by the companies include Nishad Singh and Gary Wang.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.