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Breaking: DOJ Asserts U.S Crypto Laws Irrelevant in Bankman-Fried Case

DOJ stands firm that lack of crypto laws won't shield former FTX CEO SBF from charges in the ongoing legal battle.
Breaking: DOJ Asserts U.S Crypto Laws Irrelevant in Bankman-Fried Case

Despite the ongoing debate over the U.S. crypto regulatory framework, the Department of Justice (DOJ) has firmly stated that the lack of cryptocurrency laws won’t hinder the criminal charges against former FTX CEO Sam Bankman-Fried (SBF). Their recent motion, filed on Oct. 4, rebukes claims made by SBF’s defense team.

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Existing Laws Still Apply, Emphasizes DOJ

The heart of the argument is SBF’s counsel’s assertion that since FTX wasn’t regulated in the U.S., their client shouldn’t be held accountable. Moreover, they stressed that he adhered to regulations for FTX US. However, the DOJ has dismissed this standpoint since they believe the existence or absence of specific legislation doesn’t negate the fundamental legal obligations when it comes to handling customer funds.

While crypto regulations remain a gray area, the DOJ emphasized that existing laws already prohibit the misappropriation of client assets. Hence, any arguments suggesting a regulatory vacuum are rendered irrelevant. 

Besides, they noted that such claims are misleading. Misleading customers and mismanaging their money are actions that stand in violation of these rules. Consequently, SBF now faces charges of wire fraud and mishandling customer funds, among other allegations.

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Prosecutors Eye SBF’s Charitable Endeavors

Significantly, as the trial unfolds, both sides are at loggerheads over what evidence the jury should consider. Prosecutors have expressed concerns over SBF, pointing to his charitable endeavors to sway opinions. They have urged the court to ensure that such tactics don’t paint an overly positive portrait of the defendant.

The U.S.’s failure to provide a clear regulatory path for crypto has been a longstanding issue. Federal regulators argue for treating crypto akin to traditional securities trading. However, firms like Ripple, Binance, and Coinbase oppose this view. Additionally, the government clarified its stance on allegations related to SBF’s political donations. 

While they won’t focus on the legality of these actions, they will scrutinize how SBF used funds in ways inconsistent with his claims to customers.

The DOJ’s stance serves as a reminder that regardless of the crypto regulatory landscape, foundational legal principles remain intact. As the FTX-SBF saga continues, the crypto community will watch closely, underscoring the need for clear regulations.

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Kelvin Munene Murithi

Kelvin Munene is a crypto and finance journalist with over 5 years of experience, offering in-depth market analysis and expert commentary . With a Bachelor's degree in Journalism and Actuarial Science from Mount Kenya University, Kelvin is known for his meticulous research and strong writing skills, particularly in cryptocurrency, blockchain, and financial markets. His work has been featured across top industry publications such as Coingape, Cryptobasic, MetaNews, Cryptotimes, Coinedition, TheCoinrepublic, Cryptotale, and Analytics Insight among others, where he consistently provides timely updates and insightful content. Kelvin’s focus lies in uncovering emerging trends in the crypto space, delivering factual and data-driven analyses that help readers make informed decisions. His expertise extends across market cycles, technological innovations, and regulatory shifts that shape the crypto landscape. Beyond his professional achievements, Kelvin has a passion for chess, traveling, and exploring new adventures.

Why trust CoinGape: CoinGape has covered the cryptocurrency industry since 2017, aiming to provide informative insights to our readers. Our journalists and analysts bring years of experience in market analysis and blockchain technology to ensure factual accuracy and balanced reporting. By following our Editorial Policy, our writers verify every source, fact-check each story, rely on reputable sources, and attribute quotes and media correctly. We also follow a rigorous Review Methodology when evaluating exchanges and tools. From emerging blockchain projects and coin launches to industry events and technical developments, we cover all facets of the digital asset space with unwavering commitment to timely, relevant information.
Investment disclaimer: The content reflects the author’s personal views and current market conditions. Please conduct your own research before investing in cryptocurrencies, as neither the author nor the publication is responsible for any financial losses.
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