Case With SEC, CFTC To Be Postponed Until End Of DOJ Criminal Case

A US court has halted two federal authorities’ civil cases against the former CEO of insolvent crypto exchange FTX until the DOJ finishes its criminal prosecution against its founder, Sam Bankman-Fried (SBF).

According to Reuters, Manhattan U.S. District Court Judge Kevin Castel approved a DOJ petition to delay the SEC and CFTC litigation (CTFC).

Prosecutors told Reuters that it makes sense to delay the lawsuits because the cases overlapped and the criminal case would certainly impact the civil case.

Bankman-Fried might use civil case material to unlawfully impeach government witnesses, avoid criminal discovery requirements, or modify his criminal defense, the prosecution argued.

SBF lawyers have halted civil cases.

When two regulators pursue concurrent criminal charges, stays like these are typical, Reuters reports.

In a late January court filing, the DOJ requested that Bankman-Fried be denied access to all present and former workers of the struggling crypto businesses because they may be intimidated.

After its original asset failed, FTX filed for bankruptcy last November and halted customer withdrawals. Bankman-Fried, its founder, is accused of cheating investors and mishandling user cash by loaning billions to Alameda, FTX’s trading department, to make bad bets. He awaits trial on bail.