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The U.S. Department of Justice (DOJ) has notified a federal judge that they have decided to drop the campaign finance charge against FTX founder Sam Bankman-Fried and do not intend to pursue further legal action in this matter.
The DOJ's determination followed a consultation with The Bahamas regarding the campaign finance charges in Bankman-Fried's extradition dossier last year.
In late 2022, the Department of Justice (DOJ) initially brought eight counts against Bankman-Fried. Subsequently, prosecutors tacked on five more charges. However, Bankman-Fried's defense team contended that The Bahamas, where the former FTX CEO was initially apprehended, needed to consent to those additional charges as per the extradition treaty between the U.S. and the nation. To address this issue, Judge Lewis Kaplan from the District Court for the Southern District of New York permitted the DOJ to separate those charges, and a trial was set for March.
In a recent court filing on Wednesday, it was revealed that The Bahamas had omitted the eighth charge of campaign finance violation from the original indictment in its extradition treaty.
"The Government has been informed that The Bahamas notified the United States earlier today that The Bahamas did not intend to extradite the defendant on the campaign contributions count," the DOJ letter said. "Accordingly, in keeping with its treaty obligations to The Bahamas, the Government does not intend to proceed to trial on the campaign contributions count."
The notice was issued just hours after a hearing concerning Bankman-Fried's purported effort to smear Caroline Ellison, a former executive at Alameda Research, by disclosing confidential documents to the New York Times. Assistant U.S. Attorney Danielle Sassoon commenced the hearing by stating that the Department of Justice sought to detain Bankman-Fried.
Rather than making a ruling on that motion during Wednesday's hearing, Judge Kaplan opted to establish a timetable for both the prosecution and the defense to submit written arguments regarding the matter. Meanwhile, he also imposed a temporary gag order on Bankman-Fried, prohibiting any public communication from him.
Bankman-Fried's trial is set for October 2nd, with no indication from the DOJ's letter whether prosecutors plan to merge the campaign finance charge with the second trial in March.
