Counsel Estimates Prolonged Legal Process in Sam Bankman-Fried’s Bahamas Litigation

FTX founder Sam Bankman-Fried’s fraud proceedings may face significant delays if additional charges are introduced, potentially surpassing the planned October trial date, according to his lawyers’ recent legal filings on Monday.

Bankman-Fried, who was arrested in December and subsequently extradited from the Bahamas following the collapse of his cryptocurrency empire and the bankruptcy filing in November, is currently out on bail. He has pleaded not guilty to charges that include wire fraud and money laundering.

In the legal filings, Bankman-Fried’s lawyers argue that the additional charges brought by the U.S. Department of Justice after his extradition might violate the treaty between the United States and the Bahamas. They assert that Bankman-Fried has the right to challenge any attempts to introduce these charges in overseas courts.

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The filing states, “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.”

Bankman-Fried’s defense team finds support in a recent decision by the U.S. Supreme Court, which narrowed the scope of federal fraud laws in a case involving bidding for state contracts in May. They argue that this and other legal precedents weaken the claims that Bankman-Fried defrauded a bank and those who lent money to his hedge fund, Alameda Research. The defense asserts that the lenders could potentially recover their funds through the winding-up process of the firm.

Additionally, the document highlights that Bankman-Fried’s misrepresentation of the purpose of a bank account set up for his company, North Dimension, is no longer considered a valid property right following the Supreme Court’s May opinion. The charges related to Bankman-Fried’s alleged misrepresentation of the bank account’s purpose are invalidated.

It remains to be seen how these legal arguments will unfold in the ongoing proceedings, as Bankman-Fried and his legal team continue to contest the additional charges and navigate the complex legal landscape surrounding the case.