A US judge is putting two federal regulators’ civil lawsuits against the former CEO of bankrupt crypto exchange FTX on pause until the U.S. Department of Justice (DOJ) concludes its criminal case against its founder, Sam Bankman-Fried (SBF).
According to a new report from Reuters, Manhattan U.S. District Court Judge Kevin Castel has granted a DOJ motion to hold off on the two lawsuits filed by the U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CTFC).
According to Reuters, prosecutors have said that it makes sense to delay the lawsuits because the cases substantially overlapped, and the outcome of the criminal case would likely affect what issues remained in the civil case.
The prosecutors also said there was risk that Bankman-Fried could gather evidence in the civil cases to improperly impeach government witnesses, circumvent discovery rules in criminal cases, or tailor his criminal defense.
Lawyers representing SBF have agreed to put a hold on the civil cases.
According to Reuters, stays of this type are common when two regulators run parallel criminal cases.
In a court filing from late January, the DOJ asked for a ruling that would cut off Bankman-Fried’s access to all current and former employees of the embattled crypto firms as they could be prone to intimidation.
FTX initially filed for bankruptcy last November after its native asset collapsed, and was forced to halt customer withdrawals. Its founder, Bankman-Fried, is accused of defrauding investors and mishandling user funds by loaning them out by the billions to Alameda, FTX’s trading branch, to make bets that went ultimately awry. He is currently out on bail awaiting trial.
If convicted, he could face over 100 years in prison.Don't Miss a Beat – Subscribe to get email alerts delivered directly to your inbox
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