I didn’t really have anything prepared to write about this week, but the Department of Justice is on it. Prosecutors told the judge overseeing Sam Bankman-Fried’s criminal trial that they intend to fold campaign-finance allegations into a wire fraud charge, after announcing they would have to drop the campaign-finance charge itself due to treaty obligations with the Bahamas. You’re reading State of Crypto, a CoinDesk newsletter looking at the intersection of
cryptocurrency and government. Click here to sign up for future editions. We are back in court on Friday as Sam Bankman-Fried learns whether he will have to report to jail ahead of his trial that's scheduled for October. This hearing could provide a view into Judge Lewis Kaplan’s thoughts on Bankman-Fried’s activities over the past few months, as well as hint at what we may see when the trial itself begins. First off: Please allow me to quote myself : "That doesn’t mean the U.S. Department of Justice is letting the FTX founder off on alleged criminal conduct, however — and campaign-finance charges could still be tried later." Well now we know that the
Justice Department does indeed want to bring the campaign-finance allegations , and it’s not going to let not being able to charge the specific statute be a barrier to doing so. I suspect there are about 196 reasons why the Justice Department might want to dive more deeply into this specific set of allegations. Bankman-Fried’s team hasn’t yet responded to this week's letter from the Justice Department, but we are going to hear from them later on Friday when the former FTX CEO shows up in court to learn whether he will be sent back to jail ahead of his trial in October. Obviously, I’ve written about this before, and so I'm not going to get too deep into it now, but here are the highlights: Bankman-Fried is accused of violating his bond conditions in trying to tamper with multiple witnesses as well as of other shady behavior. The Justice Department says that he has abused his privilege in being allowed to spend his pretrial time at his parents’ home, and therefore, it wants to put him back into custody. The defense claims that Bankman-Fried has done nothing improper, although his lawyers admitted that he did indeed share his former girlfriend's diary with the
New York Times. They say that jailing Bankman-Fried would make it far more difficult for him to prepare for trial and therefore receive a fair trial. Still, the odds don't appear to be on his side at this moment. Kaplan, U.S. district judge who is presiding in this case, notably ended the last hearing with Bankman-Fried by directly warning the defendant to take the proceedings seriously. It didn't sound like a casual warning from a judge to any defendant but a specific one to a defendant who he has already once said may have conducted criminal activity. Bankman-Fried will be at the New York District courthouse in Manhattan at 2 p.m. Eastern this afternoon. CoinDesk will be there of course, providing updates. Friday If you’ve got thoughts or questions on what I should discuss next week or any other feedback you’d like to share, feel free to email me at nik@coindesk.com or find me on
Twitter @nikhileshde . You can also join the group conversation on Telegram . See y’all next week!