The Blubber

Late on Wednesday, federal prosecutors involved in the investigation of the collapsed FTX cryptocurrency exchange announced their decision to withdraw several charges against Sam Bankman-Fried, the company's founder. In a court filing, the prosecutors stated that they would proceed to trial in October but would no longer pursue five out of the 13 charges initially brought against Mr. Bankman-Fried. These additional charges were included in his indictment following his extradition from the Bahamas in December, and they included allegations of bank fraud and bribery of a foreign government.

Mr. Bankman-Fried has argued that the prosecutors should not have been allowed to add more charges after his extradition. However, the withdrawal of the charges came with a significant caveat. The prosecutors requested Judge Lewis A. Kaplan of the Federal District Court in Manhattan to schedule a second trial in early 2024 specifically for those five counts.

According to the prosecutors, the delay in proceeding with these charges is a procedural necessity. Recently, Mr. Bankman-Fried obtained a favorable ruling in the Bahamas, where FTX was headquartered. The ruling grants him the opportunity to present arguments in court there, asserting that the Bahamian government should not approve the additional charges. This legal dispute in the Bahamas is expected to take several months to unfold.

In their court filing, the prosecutors explained that it is uncertain when the Bahamas will decide whether to authorize the new charges. Their decision to withdraw these charges was made in an attempt to simplify the evidence presented at trial and reduce the burden of trial preparation for Mr. Bankman-Fried.