FTX Founder Sam Bankman-Fried Seeks Dismissal of Criminal Charges

His lawyers say the charges are flawed, blaming the Justice Department’s rush to indict after the crypto exchange’s implosion

FTX founder Sam Bankman-Fried asked a New York federal judge to dismiss most of the criminal case against him, saying the Justice Department brought flawed charges in a rush to indict him after the collapse of the crypto exchange.

Lawyers for Mr. Bankman-Fried, in a series of motions Monday night, requested that many of the counts against their client be tossed out, arguing that some charges violated the terms of his extradition from the Bahamas while others didn’t meet the legal requirements of underlying criminal statutes.

Mr. Bankman-Fried was arrested in the Bahamas in December, a month after FTX filed for bankruptcy, and charged with stealing billions from the company’s customers while lying to investors and lenders to his crypto-investment firm Alameda Research. Rather than wait for the regulatory and civil process to play out, the Manhattan U.S. attorney’s office swooped in, his lawyers said in a filing.

“In sum, the government’s haste and apparent willingness to proceed without having all the relevant facts and information has produced an indictment that is not only improperly brought but legally flawed and should be dismissed,” they said.

The former chief executive’s lawyers also accused FTX, which is under new management, of acting as an agent of the Justice Department while publicly vilifying Mr. Bankman-Fried. Federal prosecutors aren’t collecting and reviewing documents themselves but rather sending FTX requests for material, the lawyers said, allowing the company to produce whatever it wants. The arrangement raises concerns that FTX isn’t handing over exculpatory material, the lawyers said.

Mr. Bankman-Fried has pleaded not guilty and is currently under home detention at his parents’ California house while he awaits trial in October.

A spokesman for the U.S. attorney’s office didn’t immediately respond to a request for comment. Federal prosecutors are expected to file a response to the motions later this month. Defendants face a high bar for obtaining the dismissal of charges before trial.

Prosecutors initially charged Mr. Bankman-Fried with eight counts, including several fraud charges, a money-laundering conspiracy and conspiring to violate campaign-finance law in a scheme to mask the true source of political donations.

After his arrest, Mr. Bankman-Fried consented to his extradition from the Bahamas, allowing for his transfer to U.S. custody. The Bahamian government agreed to release Mr. Bankman-Fried but issued what is known as a warrant of surrender specifying that he could only be tried on seven counts in the original indictment, not including the campaign-finance charge, his lawyers said. Continuing to prosecute him on the charge violates the rules of the extradition treaty between the two countries, the lawyers said.

Since the initial indictment, prosecutors have brought additional charges against Mr. Bankman-Fried, including conspiring to commit bank fraud and conspiring to bribe Chinese government officials. His lawyers say those charges should be tossed out because the Justice Department didn’t obtain the consent of the Bahamian government.

Mr. Bankman-Fried could face an uphill battle at trial. Three former members of his inner circle at FTX and Alameda have pleaded guilty to fraud and other criminal offenses, and are cooperating with the federal government.