- A federal judge refused to consolidate class-action lawsuits on FTX, giving defendants a chance to respond
- The various defendants include outside auditors and those promoting the exchange, as well as former CEO Sam Bankman-Fried and other executives of FTX
- Lawyers for Bankman-Fried signalled that there may be a need for delay in the criminal trial scheduled for October due to new charges filed against him in February
U.S. District Judge Jacqueline Scott Corley declined a request on March 8 to consolidate five proposed class-action lawsuits against crypto exchange FTX by investors alleging misappropriation of assets. Although none of the defendants had filed an opposition, the judge stated that not all defendants had been allowed to respond yet. Therefore, appointing interim class counsel before consolidation was complete would be premature.
The cases, filed in California by investors including Julie Papadakis, Michael Elliott Jessup, Stephen Pierce, Elliott Lam, and Russell Hawkins, accused former CEO Sam Bankman-Fried and other executives of FTX of misappropriating assets—the various defendants included outside auditors and those promoting the exchange.
Lawyers for Bankman-Fried signaled that there might be a need for a delay in the criminal trial scheduled for October due to new charges filed against him in February and waiting for evidence from multiple sources before proceeding with any legal action. It is hoped that such a move will allow all parties involved adequate time to review all pending cases and present their respective sides in court without any undue haste or disruption away from issues related to consolidations.
Bankman-Fried’s Lawyers Signal Need for Delay to October Criminal Trial
Lawyers representing crypto exchange FTX founder Sam Bankman-Fried have suggested that delaying the criminal trial scheduled for October may be necessary. In a March 8 letter, Bankman-Fried’s lawyers said they can’t formally request a date change just yet, as they’re still waiting to receive a “substantial portion” of evidence and more charges had been filed against him in February. This could leave them unprepared and limit their ability to defend themselves in court without undue haste or disruption.
The letter stated as follows:
“The defense has asked the Government to provide a full inventory of discovery left to be produced and a rough schedule for when we can expect to receive the superior materials. The Government has represented that it will be making a substantial production soon. Given the nature and source of these materials, which includes the contents of electronic devices belonging to two of the Government’s cooperating witnesses, we anticipate that the next production (combined with any future productions) will be voluminous and critically important to the defense.”
An imminent criminal trial will kick off in October, with the Department of Justice (DOJ) accusing Caroline Ellison and Zixiao “Gary” Wang of fraud. DOJ prosecutors have obtained evidence from devices belonging to former CEO Alameda Research Ellison and FTX co-founder Wang. This case is set to be heard in a few weeks and could have enormous implications for the fate of both accused parties.