U.S. Department of Justice (DOJ) submit A motion was filed with the court on October 4, claiming that the lack of cryptocurrency regulation in the United States does not prevent criminal charges from being brought against former FTX CEO Sam Bankman-Fried (SBF).
The DOJ’s letter was filed in response to the defendants’ request to clarify and reconsider charges related to the misappropriation of FTX funds. Lawyers for SBF argued that their client was “not guilty because FTX is not regulated in the United States and he complied with the rules governing FTX US.”
The Justice Department called this argument irrelevant, claiming that even though the presence of legislation may be necessary to prove legal duty, its absence does not affect whether a defendant’s victims promised him money. The DOJ stated that the defendants’ assertion of a lack of regulations regarding the use of client funds was false because existing rules did not apply.
The Justice Department further argued that existing law prohibits companies from stealing customer assets, for which the defendants have been charged. In addition, the defendants made material misrepresentations to customers and stole customers’ money.
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The DOJ argued that it was irrelevant whether the defendants made material misstatements or omissions in the alleged “absence of clearly applicable law or regulation.” There is no way to prove that a wire fraud charge is a “criminal act,” that is, a culpable act, regardless of whether the conduct was regulated or not.
SBF currently faces multiple charges of wire fraud and misappropriation of client funds. The former FTX CEO is currently in jail for breaching bail conditions and trying to influence potential witnesses. However, he made numerous requests for bail before the trial began, but to no avail. SBF’s legal team said a lack of internet access hampered preparations for his defense and there were no vegetarian meal options.
SBF faces the first day of a jury trial on October 3, with reports suggesting the trial could last up to six weeks.
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