Prosecutors Reconsider Charges Against Bankman-Fried

In a dramatic turn of events, U.S. prosecutors are poised to drop certain charges against Sam Bankman-Fried, the former CEO of the beleaguered crypto exchange FTX, if the Bahamas government raises objections. This revelation comes from a document recently filed in the U.S. District Court for the Southern District of New York.

Details of the Defense Motion

On May 8, Bankman-Fried’s legal team submitted a motion to dismiss four specific charges. These included serious allegations of bribing Chinese officials and violating campaign finance laws. Their argument hinged on the assertion that these charges were not included in the original indictment, which formed the basis for his extradition. Consequently, they posited that proceeding with these charges without the Bahamas’ consent would breach the extradition treaty.

The Prosecution’s Stance

In a counter-move, prosecutors contended that the extradition treaty does not inhibit them from filing additional charges after the extradition has occurred. They clarified that, as long as Bankman-Fried isn’t “detained, tried, or punished” for these new charges without the Bahamas’ consent, they can move forward. Currently, the U.S. is seeking a specialty waiver from the Bahamas—a kind of legal ‘please’ that would allow them to prosecute Bankman-Fried for three additional charges:

• Conspiracy to commit bank fraud
• Conspiracy to operate an unlicensed money transmitting business
• Conspiracy to violate the Foreign Corrupt Practices Act

The Exception of Campaign Finance Violations

Interestingly, one charge—making illegal campaign contributions—remains intact. Prosecutors assert that this particular charge was mentioned in the original indictment and in the diplomatic note during Bankman-Fried’s extradition. Despite the defense claiming this wasn’t included on the surrender warrant, the prosecutors argue it was sufficient to maintain the charge without needing a waiver.

Legal Back and Forth

Further complicating the matter, prosecutors stated that Bankman-Fried lacks the standing to challenge any of the charges as violations of the extradition treaty. They firmly believe that only the Bahamas has that legal footing here.

Next Steps and Background

The next step in this legal saga will be a hearing set for June 15, where these motions will be further deliberated.

Bankman-Fried, once hailed as a crypto prodigy, now finds himself at the center of a legal storm that follows the catastrophic collapse of FTX—a failure that triggered a liquidity crisis and an estimated $3 billion debt to creditors. To add fuel to the fire, former colleagues like Caroline Ellison and Gary Wang have already pleaded guilty to fraud charges, while Bankman-Fried staunchly insists that managerial missteps, not fraudulent intentions, led to the downfall of the crypto giant.