- Sam Bankman-Fried’s civil case against the SEC and CFTC will now be heard after his criminal trial
- State prosecutors are worried about the fact that the same evidence is being used in both cases
- The civil cases will now be heard in 2024, when Bankman-Fried may already have been convicted of various financial crimes
The Commodities Futures Trading Commission (CFTC) and Securities Exchange Commission’s (SEC) civil proceedings against Sam Bankman-Fried have been deferred until after his criminal trial in October, as per the request of prosecutors. The motion was submitted by Damian Williams, the U.S. Attorney for the Southern District of New York, on February 7 and was granted yesterday, which will mean that Bankman-Fried will face the multiple charges while the judge is thinking up his sentence should he be found guilty.
Same Evidence Presents a Problem
Williams asked for the delay, seeing as the three cases, the two civil cases and the criminal one, will rest on the same evidence against Bankman-Fried, and that the criminal trial, set for October, will have a “significant impact” on CFTC and SEC cases. Williams also suggested that moving ahead with the civil cases first might give Bankman-Fried unfair advantages in the criminal trial, given that the FTX founder has the capability to “improperly obtain impeachment material regarding the government’s witnesses, circumvent the criminal discovery rules, and improperly tailor his defense in the criminal case.”
SEC and CFTC Have Lengthy Charge Sheet
Bankman-Fried’s legal team did not oppose William’s motion to defer the proceedings, leaving the judge with a straightforward decision and granted the motion to delay, meaning these civil cases will be heard in 2024. The SEC and CFTC have charged Bankman-Fried over the disguising of “special treatment” afforded to Alameda Research, including a virtually unlimited “line of credit” funded by the platform’s customers and exempting Alameda from certain key FTX risk mitigation measures; undisclosed risk stemming from FTX’s exposure to Alameda’s significant holdings of overvalued, illiquid assets such as FTX-affiliated tokens; and using commingled FTX customers’ funds at Alameda to make undisclosed venture investments, lavish real estate purchases, and large political donations.
