Sam Bankman-Fried Faces Dual Trials in NYC as Judge Approves Case Division

Jimmy Aki
Last Updated:

Please note that we are not authorised to provide any investment advice. The content on this page is for information purposes only.

Sam Bankman-Fried, the co-founder of FTX, is now facing two separate trials as criminal charges against him have been divided. 

The former CEO is being prosecuted for his alleged mismanagement of the crypto exchange, and the separate trials will address these charges individually.

In October, he will face the initial charges filed after extradition from the Bahamas, and in March 2024, he will have a second trial for charges brought against him upon his return to the US.

Judge Splits Bankman-Fried Trials 

In a recent development, Sam Bankman-Fried has been given the green light to proceed to trial on charges related to wire fraud and political contribution.

Manhattan Federal Court Judge Lewis Kaplan has granted the government’s request to separate the 13 charges against the controversial crypto entrepreneur after hearing arguments. 

According to prosecutors, Bankman-Fried once hailed as the “king of cryptocurrency,” is accused of orchestrating a long-term fraud scheme. 

They allege that he victimized thousands of FTX customers by diverting stolen deposits amounting to billions of dollars to repay the debts of his trading firm, Alameda Research, among other related crimes.

When he was extradited in December 2022, Bankman-Fried faced eight counts, including wire fraud and money laundering. 

However, in February 2023, an amended indictment was filed, adding four more charges to the multibillion-dollar fraud case. 

These charges involve a bank fraud conspiracy and allegations that he made secret donations totaling millions of dollars to Republicans and Democrats in the United States for personal gain.

In March 2023, prosecutors unveiled another charge, accusing the entrepreneur of attempting to bribe Chinese officials with $40 million in cryptocurrency to unfreeze $1 billion in his trading accounts.

The ruling comes at a time when there is an ongoing legal battle surrounding Bankman-Fried and his involvement in different schemes in the cryptocurrency industry.

Sam Bankman-Fried Plead Not Guilty to Most Charges

This trial carries significant implications for the cryptocurrency industry as a whole. 

As cryptocurrencies continue to gain mainstream adoption and attract the attention of regulators worldwide, cases like Bankman-Fried’s serve as critical tests for the legal standards of this emerging market.

However, Bankman-Fried’s attorneys recently filed a motion to dismiss most of the charges against him, citing various reasons to support their request. 

Some of the motions focused on legal issues, such as the failure to properly state an offense or establish valid property rights.

Additionally, Bankman-Fried sought to dismiss certain charges that were brought after his extradition to the United States, arguing that the Bahamas had not consented to those charges.

One of Bankman-Fried’s attorneys, Mark Cohen, argued in a crowded courtroom that the campaign-financing charge should either be dismissed or separated from the other charges based on a technicality.

However, the federal prosecutors countered by stating that Bankman-Fried could not raise diplomatic issues and indicated that they would seek approval from a Bahamas court before proceeding with the new charges.

Furthermore, Judge Kaplan appeared skeptical and unconvinced, expressing doubts about the defense’s attempts to dismiss the bank and wire fraud charges.

Despite the ongoing legal battles surrounding the fallout from FTX, it appears that the trial scheduled for October will proceed at the Manhattan court. 

Moreover, there is an ongoing bankruptcy proceeding, and a separate lawsuit has been filed targeting FTX’s celebrity promoters and Bankman-Fried himself.

The Commodity Futures Trading Commission (CFTC) has also filed a lawsuit against the cryptocurrency entrepreneur, adding to the legal complexity of the situation.

Nonetheless, the recent decision to allow Bankman-Fried to go to trial on wire fraud and political contribution charges signifies a crucial step in the legal proceedings against him. 

The trial will shed light on the allegations of market manipulation, wire fraud, and illegal political contributions. This would provide an opportunity to examine the evidence and determine Bankman-Fried’s culpability. 

As the trial unfolds, the cryptocurrency industry and its actors will closely monitor the proceedings, as the outcome could have serious implications for the future of the industry and its regulatory landscape.

About Jimmy Aki PRO INVESTOR

Based in the UK, Jimmy is an economic researcher with outstanding hands-on and heads-on experience in Macroeconomic finance analysis, forecasting and planning. He has honed his skills having worked cross-continental as a finance analyst, which gives him inter-cultural experience. He currently has a strong passion for regulation and macroeconomic trends as it allows him peek under the global bonnet to see how the world works.