A lingering legal battle may be in the cards for FTX founder Sam Bankman-Fried, as his attorneys suggest that further charges brought against him could significantly delay fraud proceedings. The proposed extra charges could result from the U.S. Department of Justice and may even breach the extradition treaty between the United States and the Bahamas. This impending legal battle could span months, if not years, and directly challenges the planned October trial date for Bankman-Fried’s case.
Bankman-Fried was arrested in December and extradited from the Bahamas following his crypto empire’s collapse, which filed for bankruptcy in November. He has since posted bail and pleaded not guilty to allegations such as wire fraud and money laundering. In response, Bankman-Fried’s counsel is now fighting any additional charges in Bahamian courts.
In their defense, Bankman-Fried’s lawyers point to the narrowing of federal fraud laws by the U.S. Supreme Court in a May case involving state contracts. They argue that this revised scope, coupled with other case-law, undermines allegations that Bankman-Fried defrauded banks and those who lent money to his hedge fund, Alameda Research. In fact, his counsel insists the Alameda lenders were not deprived of their rights to collect existing loans, as they have been in the process of winding up the firm and are vigorously asserting their rights in FTX’s bankruptcy hearings.
The defense further contends that the Supreme Court’s May decision renders invalid charges that Bankman-Fried misrepresented the purpose of a bank account set up for his company North Dimension. Accordingly, the court’s latest stance on the issue dictates that Bank-1’s right to control access to its bank accounts no longer holds up as a valid property right.
The U.S. government argues the opposite, asserting in May filings that it can simply request the Bahamas’ consent to impose additional charges. The government also maintains jurisdiction, stating that Bankman-Fried’s actions had palpable implications on U.S. crypto markets.
With all these factors at play, an initial hearing has been scheduled for Thursday. As legal proceedings unravel and tensions rise, it remains uncertain how this case will progress and what consequences may ripple through the crypto community, particularly for those who engage in business with Alameda Research, FTX, North Dimension, and other related entities.
Source: Coindesk
