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S.B.F.’s Varsity Blues Defense

“Bankman-Fried,” his lawyers stated, “has not defrauded anyone, nor intended to defraud anyone.”
“Bankman-Fried,” his lawyers stated, “has not defrauded anyone, nor intended to defraud anyone.” Photo: Michael M. Santiago/Getty Images
Eriq Gardner
May 15, 2023

The prosecution of Sam Bankman-Fried, accused of engineering “one of the biggest financial frauds in American history,” would appear to be an open-and-shut case, which is perhaps why most members of S.B.F.’s inner circle at FTX—Caroline Ellison, Gary Wang, Nishad Singh—have accepted plea deals with the Justice Department. The 13-count indictment lays out in meticulous detail how S.B.F. allegedly absconded with customer deposits and misled investors and lenders as the crypto market collapsed, incinerating billions of dollars in assets. But did he really commit fraud?

Not really, say Bankman-Fried’s attorneys at Cohen & Gresser, who just took their first big swing at knocking out the bulk of the criminal case. In a motion to dismiss last week, they argued that the collapse of FTX was a result of market forces during the “crypto winter,” and that prosecutors rushed to frame S.B.F. as the fall guy rather than letting traditional civil and regulatory processes address the situation. “Bankman-Fried,” his lawyers add, “has not defrauded anyone, nor intended to defraud anyone.”