Sam Bankman-Fried, in First Detailed Protection, Seeks to Dismiss Prices

Sam Bankman-Fried, in First Detailed Protection, Seeks to Dismiss Prices


Sam Bankman-Fried, the founding father of the collapsed cryptocurrency trade 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 legislation agency representing FTX in its chapter has been doing the federal government’s bidding.

In court docket filings late Monday, legal professionals for Mr. Bankman-Fried stated FTX and its legal professionals on the agency Sullivan & Cromwell had change into de facto brokers of federal prosecutors constructing the prison case towards him and is likely to be 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 total information, and in the end pressured him to step down as C.E.O.,” the legal professionals wrote.

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

In impact, they argued, prosecutors have been “outsourcing” the authorized requirement to offer doubtlessly useful materials to the protection workforce, shifting that duty to a “non-public celebration” with no obligation to Mr. Bankman-Fried.

Representatives for FTX, Sullivan & Cromwell and the U.S. 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 tens of millions of {dollars} on Democratic and Republican candidates.

Mr. Bankman-Fried, 31, has pleaded not responsible to these prices. His legal professionals 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’ dwelling 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 may spend many years in a federal jail.

The motions filed on Monday are probably the primary of many makes an attempt by Mr. Bankman-Fried’s authorized workforce both to hunt the manufacturing of extra paperwork from prosecutors or to influence Judge Lewis A. Kaplan of Federal District Court in Manhattan to dismiss a few 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 components 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 legal professionals argued that one other six of the fees must be dismissed for being too obscure 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 within the case. Mr. Bankman-Fried had employed legal professionals from the agency to assist with a spread of authorized duties earlier than FTX collapsed. When the trade imploded, Sullivan & Cromwell’s legal professionals took management, naming a veteran restructuring professional, John Jay Ray III, to exchange Mr. Bankman-Fried. One of Mr. Ray’s first acts was to difficulty a scathing report that stated FTX underneath Mr. Bankman-Fried had lacked inner controls.

But in January, the U.S. trustee within the chapter case raised objections to the legislation agency’s illustration of FTX, arguing that it had not absolutely disclosed the extent of its earlier authorized work for the trade. One of FTX’s former inner legal professionals 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 may proceed to supervise the chapter.

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

Mr. Ray, FTX and the legal professionals “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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