Former CEO of FTX Sam Bankman-Fried leaves the Federal Court in New York after pleading not guilty, 3 January, 2022.
The United States Department of Justice (DoJ) said the absence of a clear crypto legal framework will not pose a problem for pressing charges against Sam Bankman-Fried (SBF), a filling from 4 October shows.
The comment was made in response to SBF’s lawyers request for “clarification and reconsideration” of charges related to the misappropriation of FTX funds, with them claiming that their client was “not guilty” as the main exchange was not regulated in the U.S., and only FTX.US was. The DoJ said the defense’s claim was irrelevant as SBF was charged for violating existing laws for misappropriating customer assets. The DoJ wrote in the filling:
“While the existence of a law might be relevant to establish a statutory duty of care, the absence of regulation is not relevant to whether money was, in fact, entrusted to the defendant’s care by his victims. There are prohibitions on misappropriating customer assets – they are the very laws that the defendant has been charged for violating.”
The DoJ further clarified that SBF was not only charged with breaking existing laws that prohibit firms from stealing customer assets, but also for committing substantial misrepresentations to customers. The agency also dismissed the defendant’s argument that pooling and reallocating customer funds was common for the crypto industry at the time.
Another point the DoJ raised is SBF presenting his “prior good acts” — such as charitable and philanthropy events — saying it will not object to these “evidence” being permitted “so long as the evidence is presented for a proper purpose” and not only to paint him in a “rosier picture”.
FTX’s former CEO, Sam Bankman-Fried, is currently facing multiple charges of wire fraud and customer fund misappropriation in relations to the collapse of the crypto exchange in 2022. His trial officially began on Tuesday with jury selection, with the potential jurors being instructed to not research the case on their own, or discuss its details with anybody.