U.S. prosecutors have requested that the fraud instances in opposition to FTX founder Sam Bankman-Fried not proceed till the conclusion of the federal government’s felony case in opposition to him, based on court docket paperwork.
Damian Williams, the principle prosecutor overseeing the felony case in opposition to Bankman-Fried, wrote that the Commodities Future Buying and selling Fee and the Securities and Trade Fee had each consented to the keep. Bankman-Fried, former Alameda Analysis CEO Caroline Ellison, and FTX co-founder Gary Wang have additionally agreed to the keep, based on the court docket submitting.
In keeping with a Tuesday court docket submitting, Damian Williams acknowledged that the results of the felony case would most likely considerably have an effect on the civil instances. He additionally expressed concern that Bankman-Fried’s protection crew may use the invention course of within the civil case to strengthen their very own protection within the felony case, noting in Tuesday’s submitting that the felony case will probably have a “vital impression” on the civil process and may thereby be postponed.
“Permitting discovery within the Civil Circumstances to proceed with out restriction dangers giving the defendant, Samuel Bankman-Fried, the instruments to improperly receive impeachment materials relating to the Authorities’s witnesses, circumvent the felony discovery guidelines, and improperly tailor his protection within the Legal Case,” Williams wrote.
Such a transfer is just not solely unprecedented. In July 2018, the SEC quickly suspended its probe into the crypto fraudster Renwick Haddow as each the civil and felony instances have been discovered to be based mostly on the identical info and circumstances.
On Dec. 13, the SEC formally charged Bankman-Fried for creating a plan to swindle traders of FTX. Likewise, the Commodities Future Buying and selling Fee, or CFTC, has additionally accused Bankman-Fried of conducting one of many largest frauds in American historical past, accusing him of permitting funds to circulation from FTX to Alameda Analysis.
At one level, Bankman-Fried was one of many wealthiest males on the earth, having helmed one of many largest centralized crypto exchanges on the earth, he had made it a degree to cozy himself as much as regulators within the US and internationally, together with a number of folks from inside the SEC itself.
The transfer to postpone the civil trial comes after a high SEC official stepped down in January. Following stories that Dan Berkovitz, Basic Counsel on the Securities and Trade Fee, had a number of controversial conferences with Bankman-Fried, it was introduced in December that Berkovitz would depart from his position efficient Jan. 31.
In whole, Bankman-Fried is dealing with eight felony costs, together with wire fraud and conspiring to launder cash. He appeared within the federal court docket in Manhattan on January third, the place he pleaded not responsible to all eight costs. The FTX founder is now awaiting a trial which is ready to happen in October.