Counsel for Sam Bankman-Fried argued that FTX was not located in the United States, and since SBF complied with regulatory obligations regarding FTX US, charges related to FTX international should not apply.
The United States Department of Justice (DOJ) filed a court motion on October 4, arguing that the absence of crypto regulations in the U.S. does not impede the criminal charges brought against former FTX CEO Sam Bankman-Fried (SBF).
The DOJ’s letter was filed in response to the defendant’s request for clarification and reconsideration of the allegations relating to the misappropriation of funds in FTX.
SBF’s attorneys argued that their client was “not guilty because FTX was not regulated in the United States, and he followed the rules concerning FTX US.”
The Department of Justice deemed this argument irrelevant, stating that while legislation may be required to prove a legal obligation, its absence has no bearing on whether the defendant’s victims gave him money.
The DOJ noted that the defendant’s claim about a lack of regulations related to customer funds usage is false as there are present rules against it.
The Department of Justice further argued that existing laws prohibit companies from seizing customer assets and that the defendant has been charged under the same statutes.
In addition, the defendant made significant false representations to consumers and stole money from them.
The Department of Justice argued that it is irrelevant whether the defendant made material misrepresentations or omissions in the “absence of clearly applicable laws or regulations.”
Whether there is a regulation or not, it cannot be demonstrated that the wire fraud allegations are “actus reus” or guilty acts.
SBF is presently facing several charges, including wire fraud and misappropriation of customer funds.
Former FTX CEO is incarcerated for violating parole conditions and attempting to influence potential witnesses.
However, he has made numerous unsuccessful requests to be released on parole before the trial begins.
SBF’s legal team cited a lack of internet connectivity and vegan food options as obstacles to his defense preparations.
The first day of SBF’s jury trial was on October 3, with reports indicating that the trial could last up to six weeks.
