Bankman-Fried seeks documents from former FTX law firm in crypto fraud case

4:30 pm Wednesday, May 31st, 2023

By Jack Queen

(Reuters) – Sam Bankman-Fried is seeking documents from a law firm that advised his defunct FTX cryptocurrency exchange, saying in a court filing that they could help him beat fraud charges.

The former crypto mogul said the documents could prove that he relied on legal advice from Silicon Valley law firm Fenwick & West and did not believe he was breaking the law. Manhattan federal prosecutors must prove he knew his conduct was illegal.

Fenwick did not immediately respond to a request for comment Wednesday.

Bankman-Fried, the 31-year-old founder of now-defunct FTX Trading, has pleaded not guilty in Manhattan federal court to 13 counts of fraud, conspiracy, illegal campaign contributions and foreign bribery.

On Tuesday, he asked a judge to order prosecutors to turn over documents related to Fenwick’s legal advice on matters central to the government’s case, including FTX’s use of disappearing messaging services and failure to properly register with regulators.

Bankman-Fried said in the filing that each of the charges against him requires the government to prove he acted willfully and that Fenwick’s legal advice could prove that he is innocent because he thought his actions were aboveboard.

Bankman-Fried rode a boom in digital currency to a $26 billion net worth and became an influential political and philanthropic donor before FTX sought Chapter 11 protection in November.

Prosecutors allege Bankman-Fried stole billions of dollars in customer funds to plug losses in his hedge fund Alameda Research, which collapsed along with FTX last year after its risky cryptocurrency bets backfired.

On May 8, Bankman-Fried urged U.S. District Judge Lewis Kaplan to dismiss most of the charges, arguing prosecutors made a “rush to judgment” after the stunning collapse of FTX, which was once considered a bulwark of the volatile crypto industry.

Prosecutors on Monday opposed the request, calling Bankman-Fried’s claims “meritless” and arguing his alleged crimes fell within the “heartland” of the statutes he is accused of violating.

Bankman-Fried has remained largely under house arrest at his parents’ Palo Alto, California home on a $250 million bond since his December extradition from the Bahamas. His trial is scheduled for Oct. 2.

(Reporting by Jack Queen)