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US judge halts CFTC and SEC lawsuits against SBF until after criminal trial
United States District Judge Kevin Castel has granted the Justice Department's request to stay the civil lawsuits filed by the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) against Sam Bankman-Fried (SBF), the founder and former CEO of the bankrupt crypto exchange FTX. According to a Reuters report, prosecutors believe it makes sense to delay the lawsuits because the outcome of the criminal case could affect the civil proceedings. Court postpones civil proceedings against SBF A stay is a court order to temporarily or indefinitely stop a court case or the main hearing. The court may lift the suspension order at a time convenient for the continuation of the...
US judge halts CFTC and SEC lawsuits against SBF until after criminal trial
United States District Judge Kevin Castel has granted the Justice Department's request to stay the civil lawsuits filed by the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) against Sam Bankman-Fried (SBF), the founder and former CEO of the bankrupt crypto exchange FTX.
According to ReutersreportProsecutors believe it makes sense to delay the lawsuits because the outcome of the criminal proceedings could influence the civil proceedings.
Court postpones civil proceedings against SBF
A stay is a court order to temporarily or indefinitely stop a court proceeding or trial. The court may revoke the stay order at a time that deems appropriate for the continuation of the litigation.
The criminal and civil lawsuits against SBF came to FTXfiledfor voluntary Chapter 11 bankruptcy protection in November after struggling with a severe liquidity crisis.
Shortly after the bankruptcy filing, reports surfaced about how SBF and its executives at FTX trading firm Alameda Research mishandled client funds. They allegedly used their clients' assets to finance their luxuries and purchase personal property.
As a result, the SEC and CFTC filed civil fraud cases against the FTX founder over the sudden decline of his exchange. Last month Bankman-Friedpleadednot guilty in Manhattan federal court of criminal fraud for knowingly defrauding investors.
U.S. District Judge Lewis Kaplan set the trial date for the first week of October and said the trial could last four weeks. SBF is currently out on $250 million bail and could face a maximum sentence of 115 years in prison if found guilty.
SBF agrees to suspend the order
Prosecutors asked last Tuesday that a judge postpone the civil lawsuits against SBF until the criminal case is completed.
In the filing, prosecutors worried that SBF could use evidence from the civil cases to impeach government witnesses and evade discovery rules in the criminal case.
In particular, SBF agreed to the stay order for both civil cases together with the lawyer of the bankrupt properties FTX and Alameda andtheir managersGary Wang and Caroline Ellison.
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