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Government’s Decision to Drop Second Bankman-Fried Trial Leaves Questions Unanswered

Last Updated January 2, 2024 2:23 PM
James Morales
Last Updated January 2, 2024 2:23 PM

Key Takeaways

  • Prosecutors have decided to drop the remaining charges against Sam Bankman-Fried.
  • They argue that a second trial would unnecessarily delay Bankman-Fried’s sentencing.
  • However, critics have decried the decision as a missed opportunity.

Following the implosion of the FTX crypto exchange in November 2022, US Federal prosecutors charged its founder Sam Bankman-Fried with eight criminal indictments alleging fraud and money laundering. Several months later, in March 2023, they added five additional charges, including conspiracy to bribe foreign officials. 

But now, after securing convictions for seven of the eight initial charges in November, the US Government has decided not to proceed with a second trial. 

Bankman-Fried off the Hook: Government Lawyers Drop Remaining Charges

On Friday, December 29, US attorneys in charge of prosecuting Bankman-Fried said they would drop the remaining charges against him. 

Arguing that there was “strong public interest in a prompt resolution of this matter,” the government said that a second trial would unnecessarily delay the FTX founder’s sentencing, leaving both the defendant and the victims in limbo. 

However, many who have been following the case have decried the decision. 

Had it gone ahead, the second trial would have dealt with some of the more explosive charges against him. Alongside charges that he tried to bribe Chinese officials, the disgraced former billionaire was set to face allegations that he illegally financed political campaigns using FTX customer funds.

Campaign Finance Claims Overlooked?

In the wake of the FTX bankruptcy crisis, prosecutors initially charged Bankman-Fried with two counts of conspiracy to commit wire fraud, two counts of wire fraud, conspiracy to commit commodities fraud, conspiracy to commit securities fraud, conspiracy to commit money laundering and conspiracy to make unlawful campaign contributions.

When Bankman-Fried was extradited to the US, authorities in the Bahamas did not consent to trial on the final charge. When the case went to court a year later, only the fraud and money laundering charges were addressed. 

In Friday’s letter, US attorneys claimed that if they proceeded with the prosecution, they would end up presenting much of the same evidence the court has already reviewed in his fraud trial.

Bankruptcy proceedings, such as the ongoing one regarding FTX and its creditors can still pursue illegally donated money.

Since the allegations first came to light, the 31-year-old’s political donations have been the subject of intense scrutiny. 

The now-dropped charges alleged that both Democrats and Republicans benefited from illegal campaign contributions. The fiercest criticism has typically come from the right, with many pointing out that Bankman-Fried was one of the largest donors to Joe Biden’s 2020 Presidential campaign.

In a response to Friday’s announcement, Republican Congressman Tim Burchett lamented that “we won’t know which politicians he bribed or whose campaigns he influenced”. 

Meanwhile, Coinbase Chief Legal Officer Paul Grewal offered a similar assessment of the situation, albeit without the partisan undertones. Calling the decision a “miscarriage of justice” Grewal said dropping the remaining charges against the former crypto mogul was a mistake that will deny the public an opportunity to get answers.

The United States Department of Justice did not immediately respond to a request for comment.

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