The charges relating to Sam Bankman-Fried’s alleged bank fraud, operating an unlicensed money transmitter service and bribing Chinese officials may be dropped.
United States prosecutors will drop some of the charges against former FTX CEO Sam Bankman-Fried if the Bahamas government objects to them, according to a document filed on May 29 in the U.S. District Court for the Southern District of New York.
The document was filed in response to a May 8 defense motion that had attempted to dismiss some of Bankman-Fried’s charges. The defense had argued on May 8 that four of the charges, including ones related to bribing Chinese officials and violating campaign finance laws, were not in the original indictment that had been the basis for Bankman-Fried’s extradition. Therefore, they concluded that these extra charges violated the extradition treaty between the U.S. and the Bahamas and should be dismissed.
In the new response, prosecutors argued that the treaty does not prevent the U.S. from charging a defendant with additional crimes after extradition, as long as they are not “detained, tried, or punished” for these additional crimes without the consent of the extraditing country. Prosecutors said they are currently seeking a specialty waiver from the Bahamas that would allow them to try Bankman-Fried for three of the four charges the defense objected to. However, these charges will not be levied against him if the Bahamas does not grant the waiver:
“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.”
The three charges that require a waiver from the Bahamas include conspiracy to commit bank fraud (Count 9), conspiracy to operate an unlicensed money-transmitting business (Count 10) and conspiracy to violate the Foreign Corrupt Practices Act (Count 13).
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As for the remaining charge of making illegal campaign contributions, prosecutors said it was listed in the original indictment and diplomatic note that Bankman-Fried agreed to be extradited on and does not require a waiver.
In the May 8 defense motion, attorneys for Bankman-Fried argued that the campaign finance charge was not listed on the surrender warrant “Schedule of Charges” agreed to by the defendant. Prosecutors responded in the new document by claiming that this charge was in the diplomatic note, which they say Bankman-Fried agreed to be extradited on in open court. Therefore, in their opinion, the charge should not be dismissed.
Prosecutors also argued that Bankman-Fried lacks standing to challenge any of these charges as a treaty violation, as they claim that only the Bahamas government has standing to challenge them.
A hearing on the motion to dismiss is scheduled for June 15.
Bankman-Fried is the founder and former CEO of crypto exchange FTX. The exchange suffered a liquidity crisis in November, leading to its bankruptcy shortly thereafter. It is estimated to owe creditors over $3 billion.
Caroline Ellison, former CEO of sister company Alameda Research, and FTX co-founder Gary Wang have both pleaded guilty to fraud charges in connection with the exchange’s collapse. However, Bankman-Fried has claimed that the collapse was caused by management mistakes and not fraud.
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