DOJ Clamps Down on SBF’s Regulatory Loophole Defense Amid Ongoing Fraud Trial

The Department of Justice (DOJ) has asked the justice successful Sam Bankman-Fried’s (SBF) transgression lawsuit to restrict respective planned defence arguments astir fiscal regulations. Prosecutors said successful a caller tribunal filing that SBF should not beryllium allowed to assertion he’s guiltless due to the fact that cryptocurrency exchanges faced small regulation. They besides argued helium can’t usage his compliance with U.S. laws arsenic impervious of bully faith.

Prosecutors Seek to Limit SBF’s Defense Arguments About Regulations

In the Wednesday letter, national prosecutors asked U.S. District Judge Lewis Kaplan to reconsider oregon clarify a caller bid limiting proceedings evidence. They purpose to artifact Sam Bankman-Fried (SBF) from arguing that FTX’s deficiency of U.S. oversight made his actions legal. Prosecutors called the alleged assertion “inaccurate” and “highly misleading.” They said transgression laws inactive banned misappropriating lawsuit assets.

“While the beingness of a instrumentality mightiness beryllium applicable to found a statutory work of care, the lack of regularisation is not applicable to whether wealth was, successful fact, entrusted to the defendant’s attraction by his victims,” national prosecutors wrote. “And grounds oregon statement astir the lack of regularisation is lone apt to confuse the assemblage into believing that determination indispensable beryllium a regularisation imposing a work for misappropriation to person occurred.”

Prosecutors besides urged Kaplan to barroom SBF from citing his adherence to U.S. rules for the FTX U.S. exchange. They argued that wide ineligible compliance doesn’t beryllium his innocence connected circumstantial charges similar fraud. Prosecutors led by U.S. Attorney Damian Williams said SBF tin contiguous grounds of a “good-faith belief” that moving FTX lawsuit funds was allowed. But they contend pursuing different laws is irrelevant to his intent.

“As the tribunal did with grounds of different exchanges’ actions, if the suspect were to beryllium permitted to inquire astir regulations, the lack of regulations, oregon regularisation of FTX US, the authorities respectfully submits that the suspect should beryllium required to springiness announcement to the tribunal anterior to questioning a witnesser astir it,” the missive from Williams details.

Additionally, prosecutors privation to restrict SBF from rebutting their grounds astir FTX’s bankruptcy. They argued the nonaccomplishment is straight applicable to SBF’s alleged fraud conspiracy. Prosecutors besides asked the justice to clarify that SBF tin contiguous “admissible evidence” astir philanthropy, but not prop up his character.

SBF’s proceedings connected fraud and different national charges started connected Tuesday, October 3, 2023, and assemblage enactment has continued into Wednesday. As of writing, his lawyers person not yet responded to the prosecution’s latest motions.

What bash you deliberation astir the national prosecutors’ motions submitted connected Wednesday? Share your thoughts and opinions astir this taxable successful the comments conception below.