Court documents have shown that US prosecutors want the fraud cases that have been filed against Sam Bankman-Fried to not proceed until the government concludes its criminal case against him.
The main prosecutor who is overseeing the case against the FTX founder, Damian Williams, said that both the Securities and Exchange Commission (SEC) and the Commodities Futures Trading Commission (CFTC) to the delay.
The court filing shows that Sam Bankman-Fried, the co-founder of FTX, Gary Wang, and Caroline Ellison, the former Alameda Research, have all agreed to the stay.
The criminal case
In a court filing on Tuesday, the main prosecutor said that the criminal case’s outcome is likely to have a ‘significant impact’ on that of the civil cases.
Williams also expressed concerns that the legal team of the former FTX CEO would strengthen their defense in the criminal case through the discovery process of the civil case.
He also said that if the discovery in the civil cases moves forward, it would provide Sam Bankman-Fried the tools he needs for obtaining impeachment material improperly regarding the witnesses of the government.
The prosecutor said that Bankman-Fried would be able to circumvent the rules applicable in the criminal case and would be able to boost his defense.
The charges
SBF has been charged with defrauding FTX investors by the SEC, while the CFTC has filed charges of fraud and material misrepresentations against Bankman-Fried, Alameda Research, and FTX.
There are a total of eight criminal charges that have been filed against SBF in total, which include conspiracy to commit money laundering and wire fraud.
On January 3rd, the FTX founder made an appearance in Manhattan federal court and opted to plead not guilty to the eight charges filed against him and is now waiting for his trial in October.
The downfall
Only a few months ago, Bankman-Fried had been one of the most influential and powerful CEOs in the crypto space.
However, cracks had begun to appear in his empire when it was revealed that billions of the native exchange token of FTX named FTT were held by Alameda Research on its balance sheet against its liabilities.
This created panic in the market and prompted people to withdraw their funds from the FTX exchange.
It caused a bank run on the exchange and since it did not have enough customer funds for meeting the withdrawal demands, the company filed for Chapter 11 bankruptcy in November.
Bankman-Fried stepped down from his position and John Jay Ray III took over as the new CEO to oversee the restructuring process.
The former CEO was then arrested by the Bahamas police a month later at the request of US authorities. He was held at the Fox Hill Prison for a week and then extradited to the United States.
He has been released on a $250 million bond in the US and is currently living at his parent’s house in Palo Alto, California and he will stay there until his trial.