Federal prosecutors investigating the collapse of the FTX cryptocurrency exchange said late Wednesday that, at least for now, they would withdraw several of the charges facing the company’s founder, Sam Bankman-Fried.
In a court filing, the prosecutors said they would proceed to a trial in October without pursuing five of the 13 charges against Mr. Bankman-Fried — a set of accusations that the government added to the crypto mogul’s indictment in the months after he was extradited from the Bahamas in December. Among those charges was a bank fraud count, as well as an allegation that Mr. Bankman-Fried bribed a foreign government.
The withdrawal of those counts was a victory for Mr. Bankman-Fried, who has argued that prosecutors should not have been allowed to charge him with additional crimes after his extradition.
But the win came with a major caveat: The prosecutors asked the judge overseeing the case, Lewis A. Kaplan of Federal District Court in Manhattan, to schedule a second trial in early 2024 on those five counts.
The prosecutors said the delay was a procedural necessity. This week, Mr. Bankman-Fried won a ruling in the Bahamas, where FTX was based, granting him the ability to argue in court there that the Bahamian government should not consent to the additional charges. That legal dispute could take months to unfold.
In the court filing on Wednesday, the prosecutors said it was uncertain when the Bahamas would decide whether to authorize the new charges. They wrote that their move was intended to “simplify the proof at trial and decrease the burden of trial preparation” on Mr. Bankman-Fried.
Mr. Bankman-Fried was arrested in December after the collapse of FTX, one of the largest crypto exchanges in the world. He agreed to be extradited on charges that he had orchestrated a sweeping fraud in which he used billions of dollars in customer deposits to finance lavish real estate purchases, charitable donations and crypto trading.
After his arrival in the United States, Mr. Bankman-Fried was granted bail and allowed to remain under house arrest at his childhood home in Palo Alto, Calif.
In February, prosecutors filed a revised indictment, adding four new charges to the eight in the original document. The new charges included accusations that Mr. Bankman-Fried committed bank fraud and operated an unlicensed money transmitting business.
A month later, prosecutors tacked on another charge, accusing Mr. Bankman-Fried of paying a $40 million bribe to the Chinese government to unfreeze trading accounts maintained by Alameda Research, a hedge fund that he owned.
In court filings, Mr. Bankman-Fried’s lawyers have called for the new charges to be dropped because they violated elements of the extradition process between the Bahamas and the United States. In such cases, prosecutors are usually limited in bringing new charges after a defendant has been transferred.
The prosecutors said in a recent filing that they would not pursue the new charges unless the government of the Bahamas authorized them. In this week’s ruling, a Bahamian judge paved the way for Mr. Bankman-Fried to challenge that authorization in court.
Mr. Bankman-Fried has also argued that several of the original charges against him should be withdrawn, saying they were too vague or had other legal flaws. The initial indictment charged him with money laundering, securities fraud and campaign finance violations, among other crimes.
His lawyers are set to appear in federal court on Thursday to press the case that some of those charges should be dropped, too.