Damian Williams, United States Attorney for the Southern District of New York, has asked the court to delay civil proceedings against former FTX CEO Sam Bankman-Fried "until the conclusion of the parallel criminal case."
In the February 7 filings, Williams requested that the court enter an order staying the civil proceedings, as well as the U.S. Securities and Exchange Commission and Commodity Futures Trading Commission's discovery against Bankman-Fried until after her criminal case, scheduled to go to trial in October. . According to Williams, the criminal case against Bankman-Fried "would likely have a significant impact" on the SEC and CFTC civil cases.
โAll of the facts at issue in the Civil Cases are also at issue in the Criminal Case,โ the filing says. โIndeed, as to the scheme to defraud FTX.com customers, the scheme to defraud FTX.com investors, the conspiracy to commit securities fraud by materially misleading FTX.com investors, and the conspiracy to commit commodity fraud by misappropriating FTX.com customers. funds intended to be used for swap trading, virtually all of the same documents, witnesses, and other evidence that the SEC and CFTC would use to prove their claims stemming from these schemes would also be used to prove the government's criminal case."
US prosecutors ask to postpone SEC and CFTC cases against Bankman-Fried https://t.co/wxU2nOPxps pic.twitter.com/4RiSODbuZo
โ Reuters (@Reuters) February 7, 2023
Regarding the stay of discovery proceedings, the US attorney asserted without intervention that Bankman-Fried had the tools to "improperly obtain impeachment material regarding government witnesses, circumvent criminal record discovery rules and improperly adapt their defense in the criminal case". The judge supervising the SBF criminal case has already Banned former FTX CEO of using encrypted messaging apps as a bail condition after accusations of contacting witnesses potentially involved in the case.
Bankman-Fried's lawyers said he did not object to staying the SEC and CFTC's civil cases until the conclusion of the criminal case. The legal teams of former Alameda Research CEO Caroline Ellison and FTX co-founder Gary Wang have agreed to stay the CFTC case: the two have already settled their civil cases with the SEC.
Related: FTX Fallout: SBF Trial Could Set a Precedent for the Cryptocurrency Industry
Both the SEC and the CFTC filed separate lawsuits against Bankman-Fried in December shortly after his arrest in the Bahamas. The SEC's complaint sought injunctive relief that could prevent SBF from participating in the issuance, purchase, offer, or sale of any security except for its personal account, while the CFTC said it was seeking injunctive and other equitable relief, as well as Civil money penalties against the former CEO, FTX and Alameda.
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