Sam Bankman-Fried, founder of the now-defunct cryptocurrency exchange FTX, is hoping a recent Supreme Court decision limiting the scope of fraud prosecutions will help him fight charges stemming from the exchange’s collapse. Bankman-Fried has pleaded not guilty and asked a U.S. District Judge to dismiss most of the charges against him.
Legal experts say that while the Supreme Court decision may help Bankman-Fried’s case, the odds of getting the charges dismissed remain slim. Prosecutors can point to tangible property that victims lost, such as money turned over to FTX based on allegedly fraudulent statements.
The case is part of an escalating crackdown on alleged abuses at digital asset exchanges by U.S. prosecutors and regulators. Bankman-Fried faces 13 counts, including bank fraud, and his trial is set for October 2.
Experts say Bankman-Fried has an uphill battle to prove that none of the theories of fraud are applicable to escape liability. He may have a better chance of convincing the judge to dismiss the bank fraud count, which accuses him of lying to a California bank about the purpose of an account.