Sam Bankman-Fried could face 2 criminal trials, with prosecution on some charges delayed until 2024

Sam Bankman-Fried, the founder of FTX, may potentially face two criminal trials, as a federal judge has granted a request by prosecutors to delay a trial on certain charges until the following year.

Bankman-Fried is scheduled to face trial in October for charges filed against him last year. Judge Lewis A. Kaplan in Manhattan has set a trial date of March 11 for him regarding newer charges filed earlier this year.

The decision to schedule two trials was made after prosecutors stated that they would proceed with the newer charges only if the authorities in the Bahamas, where Bankman-Fried was initially arrested, give their consent.

The judge made this ruling shortly after Bankman-Fried appeared before Kaplan, while his lawyers argued for the dismissal of charges alleging that he and other top executives engaged in fraudulent activities against investors and misappropriated FTX customer deposits to fund extravagant lifestyles. Although Kaplan seemed skeptical towards some of their arguments, he did not immediately make a ruling.

Assistant U.S. Attorney Thane Rehn informed Kaplan that the charges brought in a revised indictment in February and again in March require approval from Bahamian authorities to comply with the terms of a U.S. Extradition Treaty, which came into effect when Bankman-Fried was extradited from the Bahamas in December. These new charges include an accusation that Bankman-Fried directed the payment of $40 million in bribes to a Chinese official or officials to unfreeze $1 billion in cryptocurrency that was frozen earlier in 2021.

Rehn mentioned that prosecutors would not proceed with the new charges unless they obtain the necessary waiver, citing the importance of diplomatic relationships. He stated that discussions with Bahamian authorities before the superseding indictment was unsealed led prosecutors to believe that the waiver would be granted.

Rehn also noted that a trial based on the original indictment would last four to five weeks, which is about a week shorter than if the new charges were included.

Bankman-Fried, 31, known among cryptocurrency enthusiasts as “SBF,” has pleaded not guilty to all charges. He is currently awaiting trial at his parent’s home in Palo Alto, California, where the conditions of his $250 million personal recognizance bond severely restrict his online communications and ability to transfer money. If convicted, he could potentially face several years in prison. U.S. Attorney Damian Williams has referred to this case as “one of the biggest frauds in American history.”

Bankman-Fried’s defense lawyers have requested the dismissal of the indictment, arguing that the charges are flawed. They claim that the charges are duplicative, vague, and lack specificity, typically falling under regulatory enforcement actions rather than criminal charges.

“They are attempting to criminalize a civil matter,” argued attorney Christian Everdell as he challenged the various charges against his client, including a bank fraud conspiracy charge. Everdell’s argument prompted the judge to commend him for his “exceptionally imaginative argument.”

Prosecutors allege that Bankman-Fried and other executives at his cryptocurrency operation defrauded investors and embezzled FTX customer deposits to finance extravagant real estate purchases, make political donations, and engage in risky trades at Alameda Research, his cryptocurrency hedge fund trading firm.

FTX experienced financial difficulties and declared bankruptcy in November when the global exchange ran out of funds, similar to a bank run.

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