In the Sam Bankman-Fried case, the United States is drawing new charges

Federal prosecutors investigating the collapse of cryptocurrency exchange FTX said late Wednesday that they will, at least for the time being, withdraw several charges against the company’s founder, Sam Bankman-Fred.

In a court filing, prosecutors said they would proceed to trial in October without pursuing five of the 13 charges against Mr. Bankman Fried — a set of charges the government added to the crypto magnate’s indictment in the months after his extradition. From the Bahamas in December. Among those charges were bank fraud, as well as the allegation that Mr. Fred Bankman bribed a foreign government.

Mr. Bankman-Fried argued that prosecutors should not be allowed to charge him with additional offenses after his extradition. But the withdrawal came with a major caveat: Prosecutors asked the judge overseeing the case, Louis A. Kaplan of Federal District Court in Manhattan, to schedule a second trial for early 2024 on those five counts.

Prosecutors said the delay was a procedural necessity. This week, Mr. Bankman-Fried won a ruling in the Bahamas, where FTX is headquartered, giving him the ability to argue in court there that the Bahamas government should not agree to the additional charges. This legal dispute could take months to unravel.

It is uncertain when the Bahamas will decide whether to accept the new charges, prosecutors said in the court filing on Wednesday. Their move, they wrote, was intended to “simplify the evidence at trial and reduce the burden of trial preparation” on Mr Bankman-Fried.

Mr. Bankman Fried was arrested in December after the collapse of FTX, one of the largest cryptocurrency exchanges in the world. He agreed to extradite him on charges that he orchestrated a massive fraud that used billions of dollars in customer deposits to fund luxury real estate purchases, charitable donations and cryptocurrency trading.

After arriving in the United States, Mr. Bankman-Fried was released on bail and allowed to remain under house arrest at his childhood home in Palo Alto, California.

In February, prosecutors filed an amended indictment, adding four counts to the eight in the original document. The new charges included accusations that Mr Bankman-Fred committed bank fraud and ran an unlicensed money transfer business.

A month later, prosecutors brought another charge, accusing Mr. Bankman Fried of paying a $40 million bribe to the Chinese government to unfreeze trading accounts held by Alameda Research, a hedge fund he owned.

Lawyers for Mr. Bankman-Fried said in court filings that the new charges violate elements of the extradition process between the Bahamas and the United States. In such cases, prosecutors are usually limited in bringing new charges after the defendant has been transferred.

spp He said In a recent filing they said they would not pursue new charges unless authorized by the Bahamas government. In this week to rulea Bahamian judge paved the way for Mr. Bankman-Fred to challenge this mandate in court.

Mr Bankman-Fried also argued that many of the original charges against him should be withdrawn, saying they were too vague or had other legal flaws. The initial indictment charged him with money laundering, securities fraud, and campaign finance violations, among other crimes.

His attorneys appeared in federal court on Thursday to press the case that some of those charges should be dropped as well.