Sam Bankman-Fried Questions Validity of New US Charges

Lawyers for Sam Bankman-Fried will challenge the validity of new charges filed in New York against the FTX co-founder since he was extradited to the US from the Bahamas.

(Bloomberg) — Lawyers for Sam Bankman-Fried will challenge the validity of new charges filed in New York against the FTX co-founder since he was extradited to the US from the Bahamas. 

Bankman-Fried appeared Thursday in federal court in Manhattan and pleaded not guilty to five new charges, including campaign finance violations and bribery, bringing the total to 13. Prosecutors have filed two superseding indictments since he was first charged in December, after the collapse of the cryptocurrency exchange a month earlier.

His attorney, Mark Cohen, told the judge that by pleading not guilty, Bankman-Fried “is not acknowledging he can be tried on the new counts after the extradition.” That would be the subject of a defense motion, he said. 

Outside court, Bankman-Fried’s spokesman Mark Botnick confirmed the defense team “will be challenging the new charges when motions are filed.”

Charges filed after a defendant is extradited can be challenged in some cases, but much depends on the conditions imposed at the time. By law, the government’s ability to bring new charges is generally limited to those for which a person was extradited.

But if a defendant waives their right to an extradition hearing — as Bankman-Fried did — they lose their rights under the extradition treaty, according to former US prosecutor Michael Zweiback.

“This was not a situation where there was a final order after a formal extradition process ordering him to be extradited after he exercised all his rights under the treaty,” Zweiback said. “He consented to extradition after negotiating favorable surrender terms. He waived all of his rights under the treaty.”

No Consent

However, even if authorities in the Bahamas consent to a trial on offenses not covered by the extradition, Bankman-Fried could still argue his consent to return to the US was contingent on him only being tried on the original offenses, University of Virginia Law Professor Ashley Deeks said.

Prosecutors have been notifying authorities in the Bahamas before unsealing the superseding indictments, court filings show.

Bankman-Fried, 31, initially indicated he would fight extradition following his arrest in the Bahamas in Dec. 12. He later agreed to fly back to the US where he was released from custody on a $250 million bail package following negotiations with federal prosecutors in Manhattan. 

He has now pleaded not guilty to all charges against him and is scheduled to face trial in October. 

On Monday, prosecutors charged Bankman-Fried, who is currently living at his parent’s house in California, with bribing Chinese officials, adding a new dimension to the sweeping fraud case against him. 

He is accused of authorizing a payment of $40 million in cryptocurrency to convince Chinese officials to unfreeze accounts at Alameda Research, a Hong Kong-based trading firm affiliated with FTX, holding more than $1 billion.

An earlier revised indictment unsealed in February beefed up campaign-finance related charges against Bankman-Fried, a onetime major donor to Democratic political candidates. Prosecutors claimed Bankman-Fried conspired to influence US crypto regulation through donations by him and others at FTX.

Federal prosecutor Nicolas Roos said in court on Thursday that the government had produced about 6 million pages of documents to the defense in the discovery process so far.

The case is US v. Bankman-Fried, 22-cr-673, US District Court, Southern District of New York (Manhattan).

(Adds comment from spokesman, extradition experts. An earlier version corrected the first deck head reference to Bankman-Fried’s role at FTX.)

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