What to know about the delay of CFTC and SEC cases against SBF

In this post:

  • Judge has granted a request from prosecutors to delay civil proceedings against FTX founder Sam Bankman-Fried until after his criminal trial concludes in October.
  • Bankman-Fried is being investigated for eight separate criminal offenses, the most serious of which include wire fraud and money laundering conspiracy.

A New York judge has granted a motion to defer civil proceedings against Sam Bankman-Fried “SBF,” the founder of FTX, from the Commodities Futures Trading Commission (CFTC) and the Securities Exchange Commission (SEC) until after his criminal trial in October.

Why the delay in SBF’s cases

U.S. District Judge of Manhattan, Kevin Castel, granted the motions to stay the civil proceedings on February 13. The motion was initially submitted on February 7 by Damian Williams, the U.S. Attorney for the Southern District of New York, who requested the deferral of both civil cases against SBF.

Williams claims that the key to winning all three lawsuits against Bankman-Fried is the same piece of evidence. Considering how the upcoming October trial involving the Department of Justice would affect these civil claims, they have been put on hold.

SBF may gain an unfair advantage in the Department of Justice’s trial if the cases are not postponed.

The FTX founder was equipped to inappropriately customize his defense, bypass criminal discovery laws, and improperly gather impeachment material about the government’s witnesses.

William’s request to postpone the proceedings was met with no opposition from the legal team representing Bankman-Fried. Following the departure of a high-ranking officer from the SEC in January, the decision was made to postpone the civil trial.

Several allegations surfaced in November and December alleging that SEC General Counsel Dan Berkovitz met with Bankman-Fried on several occasions, prompting the SEC to announce Berkovitz’s impending departure as of January 31.

The October trial and the SEC’s case

According to the papers filed in the case, the United States prosecutors have requested that the charges of fraud brought against SBF be put on hold until the end of the government’s criminal case against him.

It is quite likely that the outcome of the criminal case will have a significant impact on the civil lawsuits. There is also the possibility that Bankman-legal Fried’s team may use the discovery process in the civil case to bolster their own defense in the criminal prosecution. This is another source of worry.

This kind of action has been taken before. In July of 2018, the Securities and Exchange Commission (SEC) temporarily halted its investigation against the cryptocurrency fraudster Renwick Haddow when it was discovered that the civil and criminal investigations were based on the identical facts and circumstances.

Bankman-Fried is being investigated for eight separate criminal offenses, the most serious of which include wire fraud and money laundering conspiracy. On January 3rd, he entered a not-guilty plea to all eight counts, and he is now awaiting his trial in October.

The lawsuits brought against SBF by the CFTC and the SEC have been postponed until after his criminal trial, which is scheduled to take place in October.

The delay was requested to avoid giving SBF an unfair advantage in the DOJ’s trial and to prevent his defense team from using the discovery process in the civil case to strengthen their defense in the criminal case. 

Because of the delay, the outcome of the criminal case will also have the opportunity to significantly impact the civil litigation.

Disclaimer: The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decision.

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