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DOJ asserts FTX-SBF charges are legitimate despite absence of US cryptocurrency regulations.
The United States Department of Justice (DOJ) submitted a motion in court on Oct. 4, asserting that the absence of cryptocurrency regulations in the U.S. does not impede the criminal charges against former FTX CEO Sam “SBF” Bankman-Fried.
The DOJ’s correspondence was in reply to the defendant’s plea for clarification and reconsideration of charges concerning the misappropriation of funds at FTX. SBF’s attorneys contended that their client was “not guilty because FTX was not regulated in the United States, and he adhered to the rules regarding FTX US.”
The DOJ dismissed this argument as irrelevant, stating that while the presence of legislation may be necessary to establish a legal obligation, its absence does not influence whether the defendant’s victims entrusted him with their money. The DOJ emphasized that the defendant’s assertion regarding a lack of regulations governing customer funds is inaccurate, as there are indeed existing rules against such actions.
The DOJ further contended that current laws prohibit companies from misappropriating customer assets, and the defendant has been charged accordingly. Additionally, it stated that the defendant engaged in significant misrepresentations to customers and unlawfully took money from them.
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The DOJ maintained that it is irrelevant whether the defendant made significant misstatements or omissions in the alleged “absence of clearly applicable laws or regulations.” It cannot be established that the wire fraud allegations constitute “actus reus,” or guilty act, irrespective of the existence of regulations.
SBF is presently facing numerous charges of wire fraud and misappropriation of customer funds, among others. The former FTX CEO is currently incarcerated for breaching his bail conditions and attempting to influence potential witnesses. However, he has unsuccessfully appealed multiple times for release on bail prior to the trial’s commencement. SBF’s legal team pointed to a lack of internet access hindering his defense preparations, as well as the absence of vegan meal options.
SBF encountered his first day of jury trial on Oct. 3, with reports indicating that the trial could extend for as long as six weeks.
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