U.S. District Judge Kevin Castel Grants Request to Defer civil cases

Civil proceedings against Sam Bankman-Fried from the Commodities Futures Trading Commission and the Securities Exchange Commission have been postponed until after the FTX founder’s criminal trial in October. This decision was made by a judge in New York who granted a request made by prosecutors to defer the proceedings.

On February 13, 2019, the United States District Judge for the Southern District of New York, Kevin Castel, granted the motions to stay the civil proceedings “without prejudice.” This means that the cases will now be halted until after the criminal trial being conducted by the Department of Justice has concluded.

The application to delay both civil lawsuits against the FTX founder and former CEO was first presented on February 7 by Damian Williams, who serves as the United States Attorney for the Southern District of New York. The request was made in the filing.

Williams emphasized that providing the same evidence against Bankman-Fried will most likely be the deciding factor in all three cases, and that the trial that will be held by the Department of Justice in October will have a “significant impact” on these civil cases. Williams cited these reasons as the reason he wanted the delay.

He also suggested that not delaying the cases could give SBF unfair advantages in the DOJ’s trial, as the founder of FTX had the tools to “improperly obtain impeachment material regarding the government’s witnesses, circumvent the criminal discovery rules, and improperly tailor his defense in the criminal case.” If the cases were not delayed, he said, the DOJ’s trial would take place.

William’s request to postpone the proceedings was met with no opposition from the legal team representing Bankman-Fried.

As a related court development concerning SBF’s alleged witness tampering antics, on February 9 Judge Lewis Kaplan of the United States District Court for the Southern District of New York extended the FTX founder’s ban on using any encrypted messaging apps until February 21 as a condition of his bail. This was a part of the bail conditions he was required to comply with.

A week earlier, SBF’s legal team had negotiated a deal to use certain encrypted apps under strict supervision. However, Judge Kaplan overruled the agreement and suggested that he was more concerned about shutting down any encrypted communication than offering SBF a small convenience. This led SBF’s legal team to believe that the judge was more concerned about shutting down any encrypted communication than offering SBF a small convenience.