NEW YORK : Sam Bankman-Fried may find it hard to argue the fraud charges against him should be tossed because of uncertainty as to how U.S. law treats cryptocurrency, as other high-profile defendants in criminal cases involving digital assets have done.
"It's a pretty simple deception," said Shane Stansbury, a professor at Duke University School of Law and former Manhattan federal prosecutor."You really don't need to get into the weeds of how we view cryptocurrencies." He also faces two wire fraud charges and two related conspiracy counts for allegedly providing false information to Alameda lenders about the hedge fund's financial health and for the alleged theft of customer assets.
San Francisco-based blockchain payments company Ripple is contesting a 2020 SEC lawsuit accusing it of conducting an unregistered securities offering by arguing its XRP token is not a security and thus not subject to SEC oversight. The case is ongoing. Both have pleaded not guilty and argued the charges should be dismissed because insider trading charges must involve securities or commodities. In bringing wire fraud charges in both cases, prosecutors avoided taking a position on how cryptocurrencies or NFTs should be classified.It is unlikely Bankman-Fried's lawyers will attempt a similar argument because the wire fraud charges are more straightforward, Kasten said.