The DOJ, in a letter to Judge Kaplan on October 4, said Sam Bankman-Fried, the founder of FTX, could not use the lack of clear regulatory frameworks in the cryptocurrency industry as a defense against the charges against him.
The DOJ claimed that SBF violated the law prohibiting the misappropriation of customer assets, regardless of the lack of regulation on cryptocurrency exchanges. Therefore, to assert that SBF cannot be guilty would mislead the defense because there was no law prohibiting it from accessing its clients’ funds.
The DOJ also mentioned that even if SBF could prove that other crypto exchanges were “pooling and reallocation of customers funds,” this would not constitute a valid defense unless he could demonstrate that he knew of these practices and believed them to be legal.
In the meantime, Defendant asks the Court to reconsider or clarify paragraph 16 of the Order regarding the Government’s motion regarding evidence of FTX’s bankruptcy, as it has expressed limited opposition to the Government’s motion on this. subject in footnote 7 of his opposition.
Footnote 7 of the defendant’s brief asserted that “should the government introduce evidence relating to bankruptcy, the defense should be allowed to refute the prejudice inferences that such evidence could give rise to.
However, the Government believes that the Court’s order is clear, but for the avoidance of doubt, the Government has no objection to Defendant presenting admissible evidence regarding charitable or philanthropic efforts, provided that the evidence is presented for an appropriate purpose.
Many crypto companies, including Ripple and Coinbase, have criticized the lack of clear crypto regulations in the United States. They called on Congress to enact specific laws for the crypto industry.
Sam Bankman-Fried’s criminal trial began on October 3 and is expected to last six weeks. He faces seven main charges, including wire fraud, commodities fraud, securities fraud, money laundering and conspiracy to defraud the Federal Election Commission.