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Sam Bankman-Fried's Bahamas Litigation May Take ‘Months or Years,’ His Counsel Says

Sam Bankman-Fried's Bahamas Litigation May Take ‘Months or Years,’ His Counsel Says

CoindeskCoindesk2023/06/13 06:23
By:Jack Schickler

The FTX founder’s lawyers argue that a new Supreme Court judgment shows that he has not committed fraud.

Sam Bankman-Fried leaving court on February 16, 2023 (Liz Napolitano/CoinDesk)

Fraud proceedings against FTX founder Sam Bankman-Fried could be delayed by “months or years” if extra charges are added, potentially running past a planned October trial date, his lawyers have said in .

Bankman-Fried is currently on bail after being and extradited from the Bahamas after the collapse of his crypto empire, which had filed for bankruptcy in November. He has pleaded not guilty to charges including wire fraud and money laundering.

His that charges added by the U.S. Department of Justice after his extradition may breach the treaty the U.S. has with the Bahamas – and that he has the right to contest any attempt to add them 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 .

The defense case has been emboldened by the U.S. Supreme Court, which narrowed the scope of federal fraud laws in a May case involving bidding for state contracts.

This and other case-law weakens arguments that Bankman-Fried defrauded a bank and those lending money to his hedge fund Alameda Research, who could in principle still get their money back as the firm is wound up, his lawyers argue.

“The Alameda lenders were not deprived of their contractual rights to collect the existing loans” by Bankman-Fried’s actions, the document said. “We understand that Alameda’s lenders are vigorously asserting their rights in the FTX bankruptcy proceedings.”

“Bank-1’s right to control access to its bank accounts is no longer a valid property right” after the Supreme Court’s May opinion, invalidating charges that Bankman-Fried misrepresented the purpose of a bank account set up for his company North Dimension, the document said.

In , the U.S. government argued it could simply ask the Bahamas for permission to add extra charges, and that it had jurisdiction as the impact of his actions were felt in U.S. crypto markets.

An initial hearing has been set for Thursday.

Edited by Parikshit Mishra.

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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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