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Prosecutors in Sam Bankman-Fried’s criminal trial cast cold water on the FTX founder’s attempt to have several charges dismissed, but they acknowledged in court documents filed Monday that some could be dropped if the Bahamas objects.
Earlier this month, Bankman-Fried’s counsel moved to have 10 of 13 charges in the high-profile case tossed out. His lawyers claimed several charges had legal shortcomings or were too ambiguous, and that others violated the extradition process between the United States and the Bahamas.
Bankman-Fried was originally charged with eight criminal counts last December following the collapse of FTX, which included wire fraud and money laundering. Additional charges were brought against him in February related to allegedly illicit campaign donations and in March for allegedly bribing Chinese officials.
The criminal charges brought against Bankman-Fried in February also included several conspiracy charges like conspiracy to commit fraud, conspiracy to commit wire fraud, conspiracy to operate an unlicensed money-transmitting business, and conspiracy to make unlawful political contributions.
The charges added to the pressure Bankman-Fried already faces for his alleged misconduct at the helm of FTX. In December, the Department of Justice said Bankman-Fried could face a maximum sentence of 115 years in prison.
But charges brought against Bankman-Fried after the initial barrage last December—encompassed in what’s called an S5 indictment—would be dropped by prosecutors if the Bahamas does not approve, prosecutors said in Monday's court filing.
“The Government will proceed on the new charges in the S5 Indictment if The Bahamas consents to trial on these charges, and will not proceed on those counts if The Bahamas denies the Government’s request,” prosecutors said.
Prosecutors said the Bahamas is the only party involved in Bankman-Fried’s trial that could bring a valid objection to the newer charges on grounds related to the extradition agreement, as opposed to Bankman-Fried’s counsel.
Prosecutors told the court that they are currently seeking a waiver from the Bahamas and that the request is still pending, but Bankman-Fried’s motion to dismiss the charges should be denied in the meantime.
FTX’s high-profile wipeout was triggered by a steep drop in the price of FTT—the exchange's native token—which resulted in a flurry of withdrawals. As customers sprinted for the door, FTX was forced to admit it could not satisfy customer withdrawals, signaling it did not hold one-to-one reserves of customer assets.
The former crypto wunderkind was arrested in the Bahamas and then extradited to the United States, where he is currently under house arrest at his parents’ California home.
Bringing additional charges against Bankman-Fried does not violate the extradition agreement between the Bahamas and the U.S., prosecutors said.
“The mere filing of a superseding indictment does not run afoul of the treaty,” prosecutors wrote in their court filing this week. “The only question is whether the Government can now proceed to trial against the defendant, who is present in this country as a result of his extradition from The Bahamas.”
His criminal trial is currently set to begin in October.