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Trial: DOJ Challenges Bankman-Fried’s Reliance on US Crypto Regulatory Ambiguity

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The DOJ, in a letter to Judge Kaplan on Oct. 4, stated that Sam Bankman-Fried, the founder of FTX, cannot use the lack of clear regulatory frameworks in the cryptocurrency industry as a defense against the charges against him. 

The DOJ asserted that SBF broke the law prohibiting the misappropriation of customer assets, irrespective of the absence of cryptocurrency exchange regulations. Therefore, it would mislead the defense to argue that SBF cannot be guilty because there were no laws prohibiting him from accessing customer funds. 

The DOJ also mentioned that even if SBF could prove that other crypto exchanges were “pooling and reallocating customer funds,” this would not be a valid defense unless he could demonstrate that he knew about these practices and believed they were legal.

Meanwhile, the defendant is requesting the Court to reconsider or clarify paragraph 16 of the Order about the Government’s Motion concerning evidence about the FTX bankruptcy because he made limited opposition to the Government’s motion on this topic in footnote 7 of his opposition.

Footnote 7 of the defendant’s brief contended that “should the Government introduce evidence relating to the bankruptcy, the defense should be permitted to rebut the prejudicial inferences such evidence would occasion.”

However, the Government believes that the Court’s Order is clear, but to avoid any doubt, the Government has no objection to the defendant presenting admissible evidence regarding charitable or philanthropic efforts, as long as the evidence is presented for a proper purpose.

Many crypto firms, including Ripple and Coinbase, have criticized the lack of clear crypto regulations in the U.S. They have called on Congress to enact specific laws for the crypto industry.

The criminal trial of Sam Bankman-Fried began on Oct. 3 and is expected to last six weeks. He faces seven primary charges, including wire fraud, commodities fraud, securities fraud, money laundering, and conspiracy to defraud the Federal Election Commission.

 

Read also: SIM Swaps Cause Massive ETH Losses on Friend. tech

 

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