DOJ Clamps Down on SBF’s Regulatory Loophole Defense Amid Ongoing Fraud Trial

The Department of Justice (DOJ) has requested the choose in Sam Bankman-Fried’s (SBF) legal case to limit a number of deliberate protection arguments about monetary rules. Prosecutors stated in a brand new courtroom submitting that SBF shouldn’t be allowed to say he’s harmless as a result of cryptocurrency exchanges confronted little regulation. They additionally argued he can’t use his compliance with U.S. legal guidelines as proof of excellent religion.

Prosecutors Seek to Limit SBF’s Defense Arguments About Regulations

In the Wednesday letter, federal prosecutors requested U.S. District Judge Lewis Kaplan to rethink or make clear a current order limiting trial proof. They intention to dam Sam Bankman-Fried (SBF) from arguing that FTX’s lack of U.S. oversight made his actions authorized. Prosecutors referred to as the alleged declare “inaccurate” and “highly misleading.” They stated legal legal guidelines nonetheless banned misappropriating buyer property.

“While the existence of a law might be relevant to establish a statutory duty of care, the absence of regulation is not relevant to whether money was, in fact, entrusted to the defendant’s care by his victims,” federal prosecutors wrote. “And evidence or argument about the absence of regulation is only likely to confuse the jury into believing that there must be a regulation imposing a duty for misappropriation to have occurred.”

Prosecutors additionally urged Kaplan to bar SBF from citing his adherence to U.S. guidelines for the FTX U.S. alternate. They argued that basic authorized compliance doesn’t show his innocence on particular fees like fraud. Prosecutors led by U.S. Attorney Damian Williams stated SBF can current proof of a “good-faith belief” that transferring FTX buyer funds was allowed. But they contend following different legal guidelines is irrelevant to his intent.

“As the court did with evidence of other exchanges’ actions, if the defendant were to be permitted to inquire about regulations, the absence of regulations, or regulation of FTX US, the government respectfully submits that the defendant should be required to give notice to the court prior to questioning a witness about it,” the letter from Williams particulars.

Additionally, prosecutors need to limit SBF from rebutting their proof about FTX’s chapter. They argued the failure is instantly related to SBF’s alleged fraud conspiracy. Prosecutors additionally requested the choose to make clear that SBF can current “admissible evidence” about philanthropy, however not prop up his character.

SBF’s trial on fraud and different federal fees began on Tuesday, October 3, 2023, and jury choice has continued into Wednesday. As of writing, his legal professionals haven’t but responded to the prosecution’s newest motions.

What do you concentrate on the federal prosecutors’ motions submitted on Wednesday? Share your ideas and opinions about this topic within the feedback part under.