Sam Bankman-Fried Urges Court To Toss Charges

sintania.amalia00 . May 10, 2023

Techspace - Sam Bankman-Fried, Founder of the indicted FTX, has renewed his attack on a bankrupt cryptocurrency law firm as he steps up his defense against fraud, money laundering, and campaign finance charges.

On Monday night, May 8  Bankman-Fried asked a judge to name the current FTX leadership and attorneys at law firm Sullivan & Cromwell as part of the "prosecution team" in the criminal case against him.

Bankman-Fried's lawyers said FTX bankrupt was far from the only cryptocurrency company to collapse during a broad market crash in 2022, and that prosecutors hastily charged their client in a "rush to judgment." "Rather than wait for traditional civil and regulatory processes following their ordinary course to address the situation, the Government jumped in with both feet, improperly seeking to turn these civil and regulatory issues into federal crimes," his wrote.

This suggests that Bankman will target Sullivan & Cromwell and current FTX CEO John Ray in his criminal defense as well.

Sullivan & Cromwell, a prominent law firm on Wall Street, represented FTX on transactional and regulatory matters before its collapse last year. The company won court approval in January to notify FTX of bankruptcy, overcoming objections from some FTX creditors and US lawmakers that previous work created a conflict of interest.

FTX and Sullivan & Cromwell provided the government with such extensive cooperation that prosecutors have "effectively represented the company to assist the prosecution," argued Bankman-Fried.

The Bankman is fighting accusations that he stole billions of dollars in customer funds to cover losses in his Alameda Research hedge fund.

Bankman-Fried publicly attacked Sullivan & Cromwell after the exchange's collapse, claiming the company bankrupted FTX and belittled his previous work for the exchange. The company has disputed the claims.

Spokesmen for Sullivan & Cromwell and FTX did not immediately respond to requests for comment. A spokesman for the US Attorney's office in Manhattan also declined to comment.

FTX and the Sullivan & Cromwell team accused Bankman-Fried of presiding over the company's staggering internal control deficiencies and said their cooperation with the government was critical to securing speedy charges against Bankman-Fried and guilty pleas from other FTX executives.

If the judge grants Bankman-Fried's request to name them as part of the prosecution, they will be required to submit documents relevant to the case, including evidence that could potentially strengthen Bankman-Fried's defense. Usually, only prosecutors carry out this obligation.

Last year Bankman was filed for criminal prosecution regarding the collapse of the FTX cryptocurrency following a broken court appearance in the Bahamas.

Bahamian authorities arrested Bankman-Fried last Monday at the request of the US government. US prosecutors accuse him of playing a central role in FTX's rapid collapse and hiding the problems from the public and investors. The Securities and Exchange Commission said Bankman-Fried illegally used investors' money to buy real estate on behalf of himself and his family.

Bankman-Fried's downfall, however, occurred with astonishing speed. FTX filed for bankruptcy protection on November, 11 2022 when it ran out of money after the cryptocurrency equivalent of a bank run.

Before to bankruptcy, Bankman was considered a digital currency prodigy by many in Washington and on Wall Street, someone who could help make it mainstream, in part by working with policymakers to bring more oversight and trust to the industry.

Bankman-Fried is worth tens of billions of dollars at least on paper and has been able to attract celebrities like Tom Brady or former politicians like Tony Blair and Bill Clinton to his conferences in a luxury resort in the Bahamas. One of Silicon Valley's leading companies, Sequoia Capital, invests hundreds of millions of dollars in FTX.

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