United States prosecutors have announced that they will drop some of the charges against former FTX CEO Sam Bankman-Fried if the Bahamas government objects to them, as reported in a document filed on May 29 in the U.S. District Court for the Southern District of New York. This move comes in response to a May 8 defense motion that sought to dismiss some of Bankman-Fried’s charges.
The defense’s argument on May 8 was that four of the charges, including those related to bribing Chinese officials and violating campaign finance laws, were not in the original indictment which served as the basis for Bankman-Fried’s extradition. They concluded that these additional charges violated the extradition treaty between the U.S. and the Bahamas, so they should be dismissed.
On the other hand, prosecutors maintain that the treaty does not stop the U.S. from charging a defendant with additional crimes after extradition. The only stipulation is that the defendant cannot be “detained, tried, or punished” for these extra charges without the consent of the extraditing country. Currently, prosecutors are seeking a specialty waiver from the Bahamas to allow them to try Bankman-Fried for three of the four charges the defense objected to. Nevertheless, these charges will not be levied against him if the Bahamas does not grant the waiver.
The three charges dependent on a waiver from the Bahamas include Conspiracy to Commit Bank Fraud (Count 9), Conspiracy to Operate an Unlicensed Money Transmitting Business (Count 10), and Conspiracy to Violate the Foreign Corrupt Practices Act (Count 13). As for the remaining charge of making illegal campaign contributions, prosecutors argued that it was included in the original indictment and the diplomatic note agreed upon for extradition, and therefore, does not require any waiver.
Although the defense argued that the campaign finance charge was not listed on the surrender warrant “Schedule of Charges” agreed to by the defendant, the prosecutors responded by stating that this charge was in the diplomatic note. As a result, they believe the charge should not be dismissed.
Moreover, prosecutors claim that Bankman-Fried lacks the standing to challenge any of these charges as a treaty violation because only the Bahamas government can do so. A hearing on the motion to dismiss is scheduled for June 15.
It is worth mentioning that Bankman-Fried, the founder and former CEO of crypto exchange FTX, faced a liquidity crisis in November which led to the platform’s bankruptcy shortly after. The exchange is estimated to owe creditors over $3 billion. However, Bankman-Fried maintains that the collapse resulted from management mistakes rather than fraud.