Two civil lawsuits, stemming from the U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC), against former FTX CEO Sam Bankman-Fried will be paused until his criminal proceedings are complete.

US Attorney Requests Pause on SEC and CFTC Lawsuits to Prevent ‘Judicial Overlap’

According to the latest decision by a New York judge presiding over the criminal case of Sam Bankman-Fried, the co-founder of FTX, the two lawsuits filed by the top two financial regulators in the U.S. will be put on hold. Bankman-Fried was indicted by a federal grand jury in New York after his arrest, and the SEC and CFTC also filed charges against the former FTX CEO. The SEC complaint alleges that “Bankman-Fried orchestrated a years-long fraud” dating back to the creation of FTX.

The CFTC alleges that customer deposits at FTX, including both fiat currencies and cryptocurrencies, were “appropriated by Alameda for its own use” throughout the relevant period. This week, Damian Williams, the U.S. attorney for the Southern District of New York, filed a motion to stay and asked the government entities to pause the lawsuits until the criminal case is settled. Williams argued that pausing the two cases would prevent “judicial overlap” and that the criminal case in Manhattan would have a “significant impact” on both lawsuits.

The New York judge deferred the SEC and CFTC cases until the trial in Manhattan concludes. Bankman-Fried’s trial in Manhattan is scheduled to begin on Oct. 3, 2023. The FTX co-founder is charged with eight financial crimes, including conspiracy to commit wire fraud, wire fraud, conspiracy to commit commodities fraud, conspiracy to commit securities fraud, conspiracy to commit money laundering, and conspiracy to defraud the Federal Election Commission and commit campaign finance violations.

What do you think the outcome will be for Sam Bankman-Fried and FTX? Let us know what you think about this subject in the comments section below.