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

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, in search of 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 courtroom filings late Monday, attorneys for Mr. Bankman-Fried mentioned FTX and its attorneys on the agency Sullivan & Cromwell had change into de facto brokers of federal prosecutors constructing the legal case in opposition to 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 total details, and finally 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 in search of solely probably the most incriminating paperwork, although FTX may also be sitting on materials that might assist the protection.

In impact, they argued, prosecutors have been “outsourcing” the authorized requirement to present probably useful materials to the protection group, shifting that duty to a “non-public 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 unlimited 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 costs. His attorneys on the New York agency Cohen & Gresser have mentioned they’re ready to go to trial in federal courtroom 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 high 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 most definitely the primary of many makes an attempt by Mr. Bankman-Fried’s authorized group 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 among the 13 counts in opposition to him.

In all, Mr. Bankman-Fried is in search of 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 normally restricted in bringing new costs after a defendant has been transferred.

The protection attorneys argued that one other six of the fees must be dismissed for being too obscure or having different authorized flaws. They mentioned the prosecutors had displayed an “eagerness to run up costs in opposition to Mr. Bankman-Fried.”

Much of the protection’s early technique additionally focuses on the function 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 trade imploded, Sullivan & Cromwell’s attorneys took management, naming a veteran restructuring skilled, John Jay Ray III, to change Mr. Bankman-Fried. One of Mr. Ray’s first acts was to difficulty a scathing report that mentioned FTX beneath Mr. Bankman-Fried had lacked inner 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 trade. One of FTX’s former inner attorneys claimed in a courtroom submitting that Sullivan & Cromwell’s earlier work created main conflicts of curiosity.

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

In the courtroom filings on Monday, Mr. Bankman-Fried portrays Mr. Ray, FTX and the attorneys at Sullivan & Cromwell as all working in opposition to 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 function of prosecutor by publicly labeling” Mr. Bankman-Fried as “’the villain,’” the filings say.

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