The United States Department of Justice (DoJ) recently stated that charges on FTX former CEO Sam Bankman-Fried are valid despite lack of regulations regarding digital assets in the country.
Bankman-Fried’s criminal trial commenced on October 3. He has pleaded not guilty to the allegations of misappropriating user funds from the exchange.
Lack of Regulations Claim
Attorneys on both sides are still engaged in disputes regarding the admissibility of evidence that the yet-to-be-selected jury will consider. Prosecutors are presently contesting assertions, restated by Bankman-Fried, that the regulatory status of exchanges holds relevance in the case.
On October 4, DoJ filed a motion in response to the defendant’s plea for clarification and reconsideration of charges involving mishandling of funds at FTX. Attorneys representing SBF contended that their client was “innocent” on the grounds that FTX was not regulated in the U.S., and he adhered to the established guidelines for FTX US.
Despite accepting that the presence of legislation might be essential to prove a legal obligation, DoJ dismissed this argument as irrelevant. It stated that the lack of regulations does not affect whether the FTX users entrusted him with their money. The filing reads:
“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.”
On a similar note, the prosecution maintained that the wire fraud allegations pertain to the “actus reus,” or guilty act, and are not dependent on the presence or absence of regulation.
Rules Exist Against SBF’s Alleged Crimes
The DOJ emphasized that the SBF’s claim on a lack of regulations pertaining to the use of customer funds is false, as there are indeed existing rules against such actions:
“In fact, there are prohibitions on misappropriating customer assets—they are the very laws that the defendant has been charged for violating.”
Additionally, it argued that the defendant made several misrepresentations to customers and engaged in the misappropriation of their funds.
SBF is confronting multiple charges, including wire fraud and misappropriation of customer funds. Currently, he is imprisoned for violating his bail conditions and attempting to influence potential witnesses.
Moreover, despite several appeals, the former FTX CEO has been unsuccessful in securing his release on bail prior to the trial. His legal team has cited challenges such as limited internet access that are hindering his defense preparations.
